By SKM
May05, 2025
ISLAMABAD: Managing Directors of five local refineries informed financial managers of the the federal government how the sales tax exemptions on POL products, a budgetary measure imposed in the finance bill for budget 2024-25 not only increased their operational costs, but also severely impacted the initiation of $6 billion in their upgrade projects.
Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, held a meeting here on Monday with a delegation comprising Chief Executive Officers (CEOs) of Pakistan’s leading oil refineries at the Finance Division. The Chairman of the Federal Board of Revenue (FBR) and senior officials from the Finance and Revenue Division also attended the meeting.
During the meeting, the refinery heads briefed the Finance Minister and his team on their upcoming investment plans, which include multi-billion-dollar plant upgrades aimed at enhancing the domestic production capacity of petrol and diesel. The delegation highlighted that these upgrades, once implemented, have the potential to save the country close to USD 1 billion annually in foreign exchange by reducing reliance on imported refined fuels.
The refinery representatives also raised concerns regarding the change in the sales tax regime on petroleum products, specifically the shift from zero-rated to exempt supplies. They explained that this change has led to a significant increase in both operational and capital expenditure for the refining sector, adversely impacting the financial viability of their planned upgrades.
Finance Minister Senator Muhammad Aurangzeb welcomed the delegation and appreciated the vital role played by the refining sector in strengthening Pakistan’s energy security and reducing the import bill. He assured the CEOs that the government would carefully review their concerns, especially those relating to the sales tax exemptions, and added that the issue would be addressed in a manner that supports the continued growth and modernization of the domestic refining industry.
The meeting concluded with a reaffirmation of the government’s commitment to enabling long-term investment in the energy sector and promoting sustainable industrial development. Ends
