The Petroleum Division has reached an agreement on a 14-year-old multi-billion rupee duty dispute.

ByFaisal Chughtai | Published date:
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(Image credit: ppl)

According to The Express Tribune, Pakistan's Petroleum Division said oil refineries had re-invested all the money received via duties. Since FY 2007, refineries have received Rs. 200 billion in income and spent the same amount on new initiatives like infrastructure improvements, according to the division.

The topic was raised in a meeting on August 20th to discuss Pakistan's Oil Refining Policy 2021. Several tax breaks for oil refineries are included in the new policy framework. Concerns were made by the Cabinet Committee on Energy (CCoE) over refineries' use of tariff money.

According to Dawn News, the Petroleum Division changed its policy draught in response and submitted a new version to the CCOE on September 1st. The division included provisions in the revised proposal to guarantee openness in the refineries' usage of tariff money.

According to the rules, refineries may only utilize tariff income for improvements or new construction once an Engineering, Procurement, and Construction (EPC) contract has been awarded. The proposal also requires the Oil and Gas Regulatory Authority to oversee and guarantee income is used to fund new refinery developments.

The CCOE will evaluate the revised draught and determine whether to accept it or ask for further changes.

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