Government is likely to take decision to provide incentives for refineries in its upcoming meeting of Cabinet Committee on Energy next week.
The sources said at a key meeting of the oil Ministry on October 11, stakeholders reached a consensus on finalizing incentives for the country’s refineries as prolonging the decision will not serve any benefit to anyone.
They added that the Petroleum Division has prepared an updated summary that includes changes such as a 30% cap on project costs instead of the previous 40% and 10% tariff protection for existing gasoline and diesel plants when creating phased projects Until December 31, 2025 and The abolition of the 10-year tax exemption for existing refineries.
In the past, during the adoption of the Refinery Policy 2021, the CCoE asked principled questions about the proposed incentives for refineries. The CCoE questioned the use of ancillary revenues, the use of refineries for fixed charges, and the collection and use of revenues if the government allowed 10% tariff protection.
The Energy Minister has also spoken out against this policy and some of the incentives.
There will be 10 percent import duties on all types of gasoline and diesel fuel, as well as on the import of any other white products used as motor fuel, for next six years if the refinery starts setting up the project before December 31, 2025.
Likewise, from July 1, 2022, there will be no import duty or sales tax on imports of crude oil as feedstock. However, finished products are subject to import duties and sales tax, as indicated from time to time by the competent authority.