KARACHI: Pakistan has approved an oil refinery policy to encourage the establishment of new refining plants and the upgrade of existing ones, the planning ministry said on Monday, as the nation eyes billions in investment from foreign powers, particularly Saudi Arabia and the United Arab Emirates.
The South Asian nation plans to use lucrative incentives to attract $10-15 billion investment for a world-scale deep-conversion refinery and petrochemical complex. The incentives include a 20-year income tax holiday on all taxes under the Income Tax Ordinance 2001, which will apply to new deep-conversion oil refinery projects with a minimum 100,000 barrels per day refining capacity, starting before December 31, 2025, according to a policy draft seen by Arab News.
The country hopes to attract Saudi and Emirati interests through incentives offered for the deep-conversion oil refinery projects.
The energy committee of Prime Minister Imran Khan’s cabinet last week approved the Pakistan Oil Refinery Policy 2021 and directed the petroleum division to revisit the upfront incentive package offered to existing refineries in the country.
“A new oil refining policy is being rolled out this year under which various fiscal and other incentives shall be offered to existing and new players, such as Saudi Aramco, to upgrade and set up deep-conversion oil refineries in the country,” Tabish Gauhar, PM Khan’s aide on power, told Arab News.
“There was inclination from Saudi Arabia and Abu Dhabi for investment in refining sector and the government has given them the incentives through this policy,” Dr. Nazar Abbas Zaidi, former secretary of the Oil Companies Advisory Council (OCAC), told Arab News.
“The government has also offered incentives to the existing refineries to upgrade themselves so that they could produce products of Euro-V standard,” he added. “This industry is capital intensive as even a small-scale refinery needs around $2 billion investment.”
Some experts believe the new policy will help Pakistan increase its refining capacity, which would in turn reduce its import bills for petrol and diesel.
“Pakistan currently imports crude and refined products. After the implementation of the new policy, the country will be in a position to cut the imports of refined products by increasing its refining capacity,” Masood Abdali, a Texas-based energy expert and a former business development manager of Weatherford in Saudi Arabia and Bahrain, said.
Under the new policy, Pakistan will not impose duties and sales tax on the import of petroleum crude oil — the main raw material — by refineries themselves with effect from July 1, 2022. However, the finished product will be subject to import duties and sales tax, according to the policy draft.
The government will also provide tariff protection in the form of 10 percent import duty on motor gasoline and diesel of all grades as well as imports of any other white products used as fuel for any kind of motor or engine, effective from the date of commission for six years, provided that the refinery starts construction of the project before December 31, 2025.
For the upgrade of existing refineries and petrochemicals project, the policy offers a 10-year income tax holiday on all taxes under the Income Tax Ordinance 2001 from the date of commissioning of the upgrade, modernization or expansion process.
Each refinery is supposed to open and maintain a “special reserve account” for its upgrade in the National Bank of Pakistan .
Under this policy, Pakistan has also exempted projects from the Companies Profits (Workers’ Participation) Act, 1968 and Workers’ Welfare Fund Ordinance, 1971. The former binds business entities to contribute five percent of their pre-tax profits to the Workers’ Participation Fund, while the latter calls for providing low-cost housing and other amenities to industrial labor.
The government has also offered exemption from customs duties, surcharges, withholding taxes, or any other levies on import of equipment or material to be used in the projects without any certification by Pakistan’s Engineering Development Board.
Oil refineries in Pakistan are outdated and have only 20 million tons per anum (450,000 barrels per day) refining capacity, with a more pressing requirement to produce petroleum products of Euro-V standards.
Despite being integral to economic growth, no new refineries have been set up in the country for more than a decade. Only two refineries, including Pak-Arab Refinery Limited (PARCO), whose 60 percent shares are owned by the government, could be set up in Pakistan in the last 40 years. The other four include Attock Refinery Limited (ARL), National Refinery Limited (NRL), Pakistan Refinery Limited (PRL) and Byco Petroleum Pakistan Limited (BPPL).
Pakistan hopes to attract Saudi, UAE investment with new oil refinery policy
https://arab.news/rxmpf
Pakistan hopes to attract Saudi, UAE investment with new oil refinery policy
- South Asian country offers 20-year tax holiday, exemption in duties for new plants to up refining capacity
- Eyes $10-15 billion investment for a world-scale deep-conversion refinery and petrochemical complex
Death toll from heavy rains in northwestern Pakistan surges to 92
- Heavy rains in Pakistan’s northwest have injured 110, destroyed 4,200 houses since Apr. 10, says authority
- Prone to natural disasters, Pakistan consistently ranks among countries most affected by impacts of climate change
PESHAWAR: The death toll from rain-related incidents in Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province since Apr. 10 has surged to 92 while the number of injured has increased to 116, a spokesperson of the Provincial Disaster Management Authority (PDMA) confirmed on Tuesday.
The rains which began on Apr. 10 have destroyed 4,200 houses and damaged 5,900 others, PDMA spokesperson Anwar Shehzad shared. At least 17 people have been killed and 23 injured in rain-related incidents over the past three days, as per data from the PDMA’s latest report on Tuesday.
The report said the 17 dead included nine men, three women and five children while the 23 injured included nine men, three women and 11 children. Deaths and financial losses due to heavy rains were reported in Bajaur, Swat, Mansehra, Battagram, Dir Lower, Malakand, Lakki Marwat, Shangla, Mohmand and South Waziristan districts, the PDMA report added.
“At least 92 persons have died including women, children, and elderly people while 116 others were wounded since Apr. 10 in incidents involving roof collapse and lightning in parts of the province,” Shehzad told Arab News.
The PDMA’s report said the authority, district administrations and relief teams are engaged in relief activities in the affected districts. “The PDMA has also directed district administrations of the affected districts to provide immediate financial support to the victims,” it added.
Pakistan has received heavy rains this month that have triggered landslides and flash floods in several parts of the country.
The eastern province of Punjab has reported 21 lighting- and roof collapse-related deaths, while Balochistan, in the country’s southwest, reported at least 15 deaths this month from torrential rains.
In 2022, unprecedented rains swelled Pakistan’s rivers and at one point flooded a third of the country, killing 1,739 people. The floods also caused over $30 billion in damages, from which Pakistan is still trying to rebuild.
Pakistan has been prone to natural disasters and consistently ranks among the most severely affected countries in the world due to the effects of climate change.
Pakistani PM says IMF approval of $1.1 billion funding to bring economic stability
- Funding is last tranche of a $3 billion standby arrangement with the IMF secured last year
- Islamabad is seeking a new, larger long-term Extended Fund Facility agreement with the IMF
ISLAMABAD: Prime Minister Shehbaz Sharif said on Tuesday the International Monetary Fund’s approval of $1.1 billion in funding for Pakistan would bring economic stability, amid discussions for a new bailout loan.
The funding is the second and last tranche of a $3 billion standby arrangement with the IMF, which Islamabad secured last summer to help avert a sovereign default.
The approval came a day after Sharif discussed a new loan program with IMF Managing Director Kristalina Georgieva on the sidelines of the World Economic Forum in Riyadh.
“Sharif expressed his satisfaction over the release of the last financial tranche of the IMF today,” the Prime Minister’s Office (PMO) said in a statement. “Receiving the last tranche of 1.1 billion dollars from the IMF will bring more economic stability in Pakistan.”
This is the second Stand-by Arrangement (SBA) for short-term financial assistance that Pakistan has completed, the last one being in 2016 during the government of three-time PM Nawaz Sharif, who is Sharif’s elder brother.
“Bitter and difficult decisions were taken for the economic security of Pakistan, but their fruits are coming in the form of economic stability,” Sharif added about reforms under the IMF program.
The $350 billion economy faces a chronic balance of payments crisis, with nearly $24 billion to repay in debt and interest over the next fiscal year — three-time more than its central bank’s foreign currency reserves.
Islamabad is seeking a new, larger long-term Extended Fund Facility (EFF) agreement with the fund after the current standby arrangement expires this month, and continuing with necessary policy reforms to rein in deficits, build up reserves and manage soaring debt servicing.
Aramco acquires 40% stake in GO, marking first entry into Pakistani fuel retail market
- Saudi oil giant Aramco inked agreement to buy 40 percent stake in Gas and Oil Pakistan Ltd. in December 2023
- Acquisition to bring much-needed foreign direct investment in Pakistan’s energy sector, says competition commission
KARACHI: The Competition Commission of Pakistan (CCP) this week approved Saudi oil giant Aramco’s decision to acquire a 40 percent stake in local company Gas & Oil Pakistan Ltd, officially marking the Saudi company’s entry into Pakistan’s fuels retail market.
Aramco and Gas signed the agreement to acquire 40 percent stake in Gas and Oil Pakistan Ltd., a licensed oil marketing company, in December 2023. Gas and Oil Pakistan Ltd. is involved in the procurement, storage, sale, and marketing of petroleum products and lubricants. It is also one of Pakistan’s largest retail and storage companies.
Aramco is a global integrated energy and chemicals company that produces approximately one in every eight barrels of the world’s oil supply and develops cutting-edge energy technologies. Aramco Asia Singapore Pte. Ltd., a Singaporean company wholly owned by Saudi Aramco, filed the pre-merger application with the CCP. It specializes in sales, marketing, procurement, logistics, and related services, with a focus on prospecting, exploring, drilling, extracting, processing, manufacturing, refining, and marketing hydrocarbon substances.
“The Competition Commission of Pakistan (CCP) approved a 40 percent equity stake acquisition in Gas & Oil Pakistan Ltd. (GO) by Aramco, a global leader in integrated energy and chemicals,” the CCP said in a statement on Monday. “This transaction marks Aramco’s first entry into Pakistan’s fuels retail market, underscoring its confidence in the country’s economic potential and its commitment to its growth.”
The CCP said it had authorized the merger after determining that the acquisition would not result in the acquirers’ “dominance” in the relevant market post-transaction.
“Aramco’s acquisition indicates a significant milestone in Pakistan’s energy sector, bringing advanced expertise and technology to the fuels retail market,” it said. “This development is expected to boost competition, elevate service standards, and provide consumers with a broader range of high-quality products.”
The CCP said the acquisition would help bring much-needed foreign direct investment in Pakistan’s energy sector, contributing to economic growth and development of the country.
In February 2019, Pakistan and Saudi Arabia inked investment deals totaling $21 billion during the visit of Saudi Crown Prince Mohammed Bin Salman to Islamabad. The agreements included about $10 billion for an Aramco oil refinery and $1 billion for a petrochemical complex at the strategic Gwadar Port in Balochistan.
Pakistan’s Prime Minister Shehbaz Sharif, who is in Saudi Arabia for a special meeting of the World Economic Forum, held meetings this week with Saudi Arabia’s ministers of energy, economy and planning, and environment, according to his office.
In a meeting with Saudi Energy Minister Prince Abdulaziz bin Salman on Monday evening, Sharif highlighted initiatives undertaken by Pakistan to facilitate investment in the energy sector. The Saudi side showed keen interest in Pakistan’s energy projects highlighted by Sharif, the Prime Minister’s Office (PMO) said.
The proposed projects included building new and improving existing energy infrastructure, increasing focus on renewable energy, and bringing efficiency across entire energy ecosystem in Pakistan, according to the statement.
Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as the top source of remittances to the cash-strapped South Asian country.
Both countries have been closely working to increase bilateral trade and investment deals, and the Kingdom recently reaffirmed its commitment to expedite an investment package worth $5 billion.
Abu Dhabi International Book Fair kicks off with Pakistani writers participating for first time
- Two panels on Pakistani literature and drama will speak at the international fair
- This year’s fair welcomes 145 new exhibitors and publishers from around the world
ISLAMABAD: The Abu Dhabi International Book Fair, considered one of the world’s most important cultural platforms, kicked off this week in the UAE capital with participation from Pakistani writers for the first time ever.
The book fair is an annual event that brings different writers together with the goal of promoting reading, diverse cultures and knowledge locally, regionally, and globally. Organizers of the fair say their aim is also to promote cultural exchange and dialogue between several nations.
It also brings together leaders from the publishing and creative industries every year, providing promising opportunities for those involved in this sector to form new partnerships, learn about the latest trends and developments and discuss its fundamental priorities.
“Pakistan is being represented at the Abu Dhabi Internationally Book Fair at @Adnec from April 29 to May 5,” the Pakistan Consulate General Dubai wrote on social media platform X on Monday.
Two sessions at the fair will feature participation from Pakistani writers. On May 1, a session titled: “The Pakistani Drama: Capturing Diverse Realities, Dreaming Many Dreams” will be moderated by journalist Mehwish Ajaz. It will feature panelists Amna Mufti, a renowned Urdu playwright and novelist, and Shazia Ali Khan, a UAE-based Urdu film screenplay writer.
The second session is scheduled to be held on May 3 and is titled: “Pakistani Fiction’s Connection with Past, Present & Future.” This session will be moderated by Mufti and will feature participation from Urdu novelist Tahira Iqbal and Osama Siddique, an English and Urdu novelist.
This year’s fair welcomes 145 new exhibitors and publishers this year along with 12 countries joining for the first time, namely Greece, Sri Lanka, Malaysia, Pakistan, Cyprus, Bulgaria, Mozambique, Uzbekistan, Tajikistan, Turkmenistan, Kyrgyzstan, and Indonesia.
PM Sharif thanks Saudi crown prince for ‘comprehensive’ Pakistan investment program
- Pakistani PM meets Saudi Crown Prince Mohammed bin Salman during visit to Riyadh for World Economic Forum meeting
- Kingdom’s foreign minister visited Pakistan this month to push forward previously agreed investment deals, strengthen cooperation
ISLAMABAD: Prime Minister Shehbaz Sharif met Saudi Crown Prince Mohammed bin Salman on Monday to discuss matters of mutual interest and regional developments, thanking him for a “comprehensive” program presented by Saudi ministers regarding investment in Pakistan, Sharif’s office said on Monday.
Sharif has held meetings with Saudi officials and ministers since he arrived in Riyadh on Saturday to attend a two-day World Economic Forum (WEF) special meeting on energy, collaboration, and health. His visit to the Kingdom follows Saudi Foreign Minister Prince Faisal bin Farhan’s trip to Pakistan in mid-April with a high-level delegation. The Saudi foreign minister’s visit was aimed at strengthening bilateral economic cooperation and pushing forward previously agreed investment deals. Pakistan has said it pitched investment projects worth $30 billion to Riyadh during Prince Faisal’s visit.
In videos and pictures shared by Sharif’s office, the two leaders can be seen interacting with each other in the presence of their teams. Sharif thanked the Saudi crown prince for sending the high-level delegation to Pakistan and issuing directions for more Saudi delegations to visit the country “to promote investment,” the Prime Minister’s Office (PMO) said.
“The Prime Minister expressed gratitude to the Crown Prince for the hospitality during his visit to Saudi Arabia and for a comprehensive program presented by Saudi Ministers regarding investment in Pakistan,” the PMO said.
The statement added that both leaders agreed to further promote cooperation in different sectors as they discussed areas of mutual interest and expressed satisfaction over their meeting in Makkah earlier this month.
“The situation in Gaza was also discussed in the meeting,” the PMO said. “The Prime Minister reiterated the invitation to the Saudi Crown Prince to visit Pakistan.”
Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as the top source of remittances to the cash-strapped South Asian country.
Both Pakistan and Saudi Arabia have been closely working to increase bilateral trade and investment deals, and the Kingdom recently reaffirmed its commitment to expedite an investment package worth $5 billion.
Pakistan set up the Special Investment Facilitation Council (SIFC), a hybrid civil-military body, in June 2023 to attract international investments mainly from Gulf countries. The SIFC has identified mining, agriculture, energy and information technology as some of the key sectors where it hopes to attract foreign funding.
Cash-strapped Pakistan desperately needs to shore up its foreign reserves and signal to the International Monetary Fund (IMF) that it can continue to meet requirements for foreign financing that has been a key demand in previous bailout packages.
Saudi Arabia has often come to Pakistan’s aid in the past, regularly providing it oil on deferred payments and offering direct financial support to help stabilize its economy and shore up its forex reserves.
