Govt set to remove cap on refineries’ dividends

Aftab Ahmed

Islamabad: The government is all set to remove the cap of dividends by refineries in a new proposed oil refinery policy 2020.

Under a plan, capping of dividends by refineries and 7.5 percent deemed duty on high-speed diesel would be discontinued. The refinery margins will be introduced based on 50% Oil marketing companies (OMCs) margin on MS and HSD being worked out on a CPI on an annual basis.

Attock refinery is sitting on approximately 13 billion and national refinery 0.8 billion cash.

Petroleum division proposed that FOB prices plus white oil products premium for white products and FO premium for black oil products including marine freight, based on AFRA.

READ           Refineries claim Rs 47 billion losses, seek bailout package and review Petroleum Policy

In case of no imports of FO in the country, the black Oil premium appearing in the previous period’s Platts Oilgram should be used for C&F working of LDO, petroleum division added.

It further said that the pricing of 95/97 RON PMG might attract the same duties and taxes as applicable for PMG 92 RON. 5.

Petroleum division also proposed 20 years’ income tax holiday and new refinery projects and up-gradation/ expansion of existing refineries under this category shall be exempt from applying the Companies Profits (Workers’ Participation) Act 1968 and Workers’ Welfare Fund Ordinance 1971.

Exemption from all duties, taxes, surcharges, and levies on import, by the refinery project, its contractors or any other persons, of all machinery, vehicles, plant and equipment, other materials and spares and consumables for setting up, operation, maintenance, and repair of the refinery, petroleum division said.

Exemption from withholding tax and all other duties, taxes, surcharges, levies, and impost relating to foreign contractors/subcontractors and their personnel connected with engineering, procurement, construction, commissioning, operation, maintenance, and repair of the refinery.