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Govt, refineries agree to upgrade Euro-V specs

August 04, 2022 (MLN): The government and refineries agreed to upgrade on Euro-V specifications in the next 5 years, along with a deal to relegate the government’s role to only a tax collecting authority instead of a regulator, as reported by The News on Thursday.

On Wednesday, State Energy Minister Dr. Musadik Malik, former prime minister Shahid Khaqan Abbasi, secretary energy, and other officials discussed refining policy 2022 with the local refineries including Pak-Arab Refinery, Pakistan Refinery, National Refinery, Attock Refinery, and Cnergyico Pk during a meeting.

The government and refineries agreed to deregulate the sector on commercial terms. Apart from deregulation, refineries also committed to upgrading on Euro-V specifications in the next five years. Refineries would give a guarantee to the government in this regard, it said.

Sources told The News that certain performance indicators would be set in, and the Oil and Gas Regulatory Authority (OGRA) would be monitoring the situation to see the implementations of the measures under this guarantee.

“Under the deregulation of the sector, the government would only be an authority collecting petroleum levy, sales tax, and custom duty, and would not have any role in price fixation,” sources shared.

Deregulation of the sector would push the refineries and oil marketing companies (OMCs) into the competition to attract buyers by selling petroleum products at competitive rates, they added.

To note, the working on the refining policy was initiated during the tenure of the Pakistan Tehreek-e-Insaf (PTI) government, and a draft policy was finalized; however, it could not be approved after differences grew over it between the government and refineries.

The policy was not taken up by the new government after coming to power until the government convened the meeting on Wednesday to consider the refining policy.

Stakeholders from the oil sector said that it is high time that local refineries start executing the “deep conversion project”, which would increase capacity utilization after converting furnace oil (FO) into high-margin fuels like petrol (MS) and high-speed diesel (HSD), which were currently being imported for domestic consumption.

After the project, refineries would be able to produce additional 25-30 million barrels of oil products per annum, which according to estimates would save foreign exchange reserves of around $0.4 billion in the long run, it added.

Copyright Mettis Link News

Posted on:2022-08-04T12:16:16+05:00

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