By SKM
June 18, 2025
ISLAMABAD: In the meeting of SIFC held here on Wednesday, the way forward for $6 billion upgrade projects of local refineries was discussed after the refusal of IMF to government proposals.
Earlier, the IMF rejected the government proposals seeking i) the restoration of zero-rated status and ii) the imposition of the 10 percent sales tax on POL products and asked the government to come up with new proposals.
“However, It has been decided in the SIFC meeting that the authorities may further engage the IMF functionaries till the approval of the budget for FY26 by Parliament and persuade the Fund people how important the upgradation of refineries is for the country. In case the government fails to persuade the IMF, then the government would re-change the brownfield refinery policy with more incentives, so that the vital upgrade projects would be initiated and completed on time, a senior official who attended the meeting told Exclusivewaves.com.pk.
The government has already given a temporary relief to refineries in the shape of hike in IFEM (inland freight equalization margin) by Rs1.87 per liter to cope with the Rs34 billion loss refineries braved in the outgoing year just because of the sales tax exemption on POL products—a measure introduced in the Finance Bill for FY25. This hike in IFEM will cope with the loss in 12 months till June 2026.
“IMF is also not conformable with the relief the government extended to the refineries through a hike in IFEM and it may not let the government extend this relief after June 2026,” the official said.
Refineries are of the view that their lenders will not extend financing till the government announces the resolution of the sales tax exemption once for all at least for 6-7 years—the time of up-gradation of refineries. Once the refineries are upgraded the environment-friendly petrol, diesel and other POL products at par with Euro-V specification will be available in the country and the production of furnace oil will be minimized.
In the SIFC meeting, on the project of while oil pipeline to be laid down from Machhikay to Tarujabba by FWO (Frontier Works Organization) with equality for 25 percent of SOCAR— a state-owned company of Azerbaijan, the Ministry of Finance opposed the project on the plea that it would not endorse the project as its transportation tariff would be in US dollar terms. The top leadership of the government wants the investment of Azerbaijan in this project. However, it has been decided that top officials of the Finance, Petroleum and OGRA would sit and thrash out the accepted solution.
Coming to the issue of the gas supply to national steel mill (Tawarqui), the official said, Sui Southern agreed to provide the gas at the industrial gas tariff, but the company wanted the rate of gas at par with the tariff of fertilizer sector. “So this issue could not be resolved in the meeting.”
However, the press release issued later on says that the Special Investment Facilitation Council (SIFC) convened the 14th meeting of its Executive Committee on June 18, 2025 to review progress on various aspects and projects, being steered under key sectors of SIFC.
The meeting was chaired by the Federal Minister for Planning, Development and Special Initiatives and attended by concerned Federal Ministers, the National Coordinator SIFC, Federal Secretaries, Provincial Secretaries, and high-level government officials.
The ministries presented progress on various projects and policy-level initiatives, being steered through the platform of SIFC, and gave comprehensive plans for fast tracking various related matters.
The Committee discussed and developed consensus on major policy aspects concerning key sectors with a view to unlock new investments and facilitate existing investors – Petroleum sector with special focus on Upgradation of Brownfield Refineries, Communication sector with enhanced emphasis on strategic projects of Railways and new motorways, revival of Tourism sector with renewed approach, stimulation of Livestock sector, diversification of Auto Industry and optimization of Information Technology sector through Special Tech Zones.
The Committee reviewed the progress and gave directions for swift implementation of important projects in the key sectors by encouraging private sector participation through public-private partnerships to support economic activities in the country.
The committee gave directions to expedite various pending cross-sectoral matters through policy level initiatives and stakeholder’s consultation, utilizing the forum of SIFC. Ends
| ReplyForward |
