Brownfield refinery upgradation policy: Petroleum Division to draft proposals aimed at addressing hurdles

ISLAMABAD: The Petroleum Division is set to draft a comprehensive proposal addressing sales tax hurdles and other operational challenges regarding the Brownfield Refinery Upgradation Policy.

This proposal will be submitted to the relevant authorities for review ahead of the finalisation of the upcoming budget.In this connection, Federal Minister for Petroleum Ali Pervaiz Malik chaired a high-level meeting at the Petroleum Division with the CEOs/ Managing Directors of the country’s oil refineries to review and accelerate the operationalisation of the Brownfield Upgradation Refinery Policy.

The meeting was attended by the Secretary Petroleum, Additional Secretary (Policy), Director General (Oil), CEO Pakistan Refinery Limited, MD PARCO, CEO Attock Refinery Limited, CEO Cynergico, and CEO National Refinery Limited.

The exemption of sales tax on petroleum products was identified as the key issue affecting the viability of upgradation projects.

The Minister directed that a comprehensive proposal addressing these challenges be finalised and submitted to the relevant forum before the finalisation of the upcoming budget, so that the refining policies may be implemented without delay.

At the outset, the Federal Minister underscored the strategic importance of the refining sector and emphasised that local refineries are critical national assets for ensuring an uninterrupted fuel supply and strengthening Pakistan’s energy security. He noted that the ongoing regional situation arising from the US-Iran conflict has further highlighted the urgency of reducing reliance on external supply chains and ensuring maximum domestic refining flexibility/ capability.

The Minister stressed that the timely upgradation of existing refineries is essential to enhance production capacity, improve efficiency, and ensure the supply of cleaner Euro V fuels in line with international standards.

He stated that refinery upgradation will enable Pakistan’s refineries to produce Euro-V compliant fuels, contributing significantly towards improved environmental outcomes, better engine performance, and reduced emissions.

The minister observed that despite the issuance of both refining policies in 2023, progress on implementation has remained stalled. He emphasised that removing the bottlenecks is crucial for moving forward with refinery modernization and attracting long-term investment in the sector.

During the meeting, the refining policies and the Upgradation Agreement template were reviewed in detail to ensure their effective and timely operationalization. The CEOs/ Managing Directors highlighted key challenges and proposed practical measures for resolution. They stated they had full confidence in the Petroleum Division’s efforts.

The federal minister reaffirmed the government’s commitment to supporting refinery upgradation as a national priority and stated that modernising Pakistan’s refining infrastructure is essential for ensuring energy security, promoting cleaner fuels, and strengthening the country’s resilience against external disruptions.

Copyright Business Recorder, 2026