ISLAMABAD: Pakistan’s oil refineries have called on Finance Minister Senator Muhammad Aurangzeb to urgently intervene in the matter of removal of General Sales Tax (GST) exemption on petroleum products.
In a joint letter to the finance minister, the chief executive officers (CEOs) of five major refineries — Attock Refinery Limited, Cnergyico PK Limited, National Refinery Limited, Pakistan Refinery Limited, and Managing Director Pak-Arab Refinery Limited — highlighted the significant challenge currently faced by the oil refining industry.
The refineries pointed out that the Finance Act 2024 had altered the sales tax status of petroleum products (including petrol, high-speed diesel, kerosene oil, and light diesel oil) from zero-rated to exempt. This change has led to the disallowance of input sales tax claims, significantly increasing both operational and capital costs for local refineries.
The refineries argue that this shift in sales tax law is severely affecting the financial viability of their planned upgrade projects, infrastructure development, and day-to-day operations. They warned that continuing this exemption would lead to a drastic erosion of profitability and place immense financial strain on the industry. “This issue threatens the progress and sustainability of critical capital-intensive projects, thus undermining the objectives of the Brownfield Refining Upgradation Policy approved by the government in August 2023,” the refinery CEOs stated.
They also informed the finance minister that, despite ongoing efforts over the past seven months, including active coordination with the Ministry of Energy (Petroleum Division), the Oil and Gas Regulatory Authority (OGRA), and the Federal Board of Revenue (FBR), the issue remains unresolved.
“The delay in addressing this matter is jeopardising the survival of Pakistan’s oil refining industry and continues to pose significant challenges,” they said, urging the finance minister’s urgent intervention for a swift and amicable resolution.
The oil refining industry has requested an immediate meeting with the finance minister to discuss and resolve this critical issue.
Copyright Business Recorder, 2025
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