Islamabad: The government has prepared a proposal to grant incentive of ten-year tax holiday for refineries on expansions and upgradation projects.
Sources told Newztodays.com that Petroleum Division has prepared a proposal that would be tabled before working group comprising representatives of oil refineries and officials of Petroleum Division.
Since last year, the refineries had faced a crisis of furnace oil as their stocks piled up in winter season and refineries were forced to cut their production. The government had given two options to the refineries last year either to export furnace oil or set up upgradation plants to covert furnace oil into other petroleum products.
According to industry officials, there were modern refineries in the world that were converting furnace oil into petroleum products. They further said that there was no demand of furnace oil in the world and therefore, they had not been able to export furnace oil. During the current year, there was also a problem of furnace oil stocks and government had now set up working group to prepare recommendations to incentivized the refineries to set up upgradation projects.
‘Only option is to incentivized the refineries as upgradation projects are expensive which requires millions of dollars, industry officials said.
The government has formed a working group comprising representatives of refineries including ARL, NRL and PRL to work out a formula of expansion and upgradation projects. The working group has been formed following issue of furnace oil crisis being faced by local refineries.
The decision was taken by special assistant to prime minister on petroleum and natural resources Nadeem Babar in a meeting held in Petroleum ministry. The group also comprises officials of petroleum division. The group would finalize viable and economic policy recommendations for sustainable operations of the refineries to undertake future upgradation projects.
The working group will also consider how to consider export by giving support to refineries, industry officials said adding that special assistant to Prime Minister on Petroleum Nadeem Babar had suggested a group to discuss all incentives to upgrade and also recommend margins for refineries.