The Cabinet Committee on Energy (CCoE) led by Planning Minister Asad Umar had earlier approved an incentives package for modern refineries that also included 20-year tax holiday but had refused to allow such protections to existing refineries for refurbishment.
Sources said the petroleum division has now removed both objections raised by the CCoE regarding incentives to old refineries currently operating in the country. The 10-year tax holiday has been abolished and upfront government contribution has been reduced to 30pc in the final draft as against 40pc rejected by the CCoE.
This contribution has to be generated through 10pc customs duty on petrol and diesel and to be kept in the special reserve account to finance upgrades of existing refineries and have already been covered in the finance bill for 2021-22. Under the revised policy, there will be no guarantee of rate of return for existing refineries provided by the regulator or the government of Pakistan and refineries shall be allowed to open and maintain foreign currency accounts. They shall be allowed to retain a certain portion of export proceeds in a foreign currency, if any, to meet operational requirements.
planning minister asad umar package improving.
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