Pakistan’s oil refining sector has once again urged the federal government to expedite the signing of the Upgrade and Escrow Agreements under the amended Brownfield Refineries Upgradation Policy, warning that continued delays could negatively impact investment plans and the country’s long-term energy security.
The appeal comes after the Cabinet Committee on Energy approved amendments to the Brownfield Refineries Upgradation Policy. While refinery operators welcomed the policy changes, they expressed concern over a provision that retrospectively reduces deemed duty protection for refineries that had not formally signed the Upgrade Agreements by October 22, 2024.
According to industry representatives, the delay in executing these agreements was not caused by the refineries themselves. Instead, they argue that all required obligations were fulfilled well before the deadline, and the remaining process depended on government action.
Attock Refinery Limited (ARL), in a letter addressed to the Petroleum Division, stated that it had completed every procedural requirement necessary to move forward with the upgrade initiative. The company emphasized that it had secured board approvals, finalized draft agreements with the Oil and Gas Regulatory Authority (OGRA), and arranged the mandatory bank guarantees within the prescribed timeframe.
ARL also noted that National Refinery Limited (NRL) completed similar requirements before the deadline. Both companies maintain that the agreements remained unsigned due to administrative delays rather than any failure on the part of the refinery operators.
The refinery sector believes that applying reduced deemed duty protection retrospectively would unfairly penalize companies that complied with government requirements. Industry officials argue that investors should not bear financial consequences resulting from procedural delays outside their control.
The Brownfield Refineries Upgradation Policy was introduced to encourage significant investment in Pakistan’s refining industry. The initiative aims to modernize existing facilities, improve fuel quality, increase production efficiency, and enable domestic refineries to produce cleaner petroleum products that meet international environmental standards.
Successful implementation of the policy is expected to reduce Pakistan’s reliance on imported refined petroleum products while strengthening the country’s energy infrastructure. Industry experts believe refinery modernization would also create employment opportunities, attract fresh investment, and improve the overall competitiveness of Pakistan’s energy sector.
However, uncertainty surrounding the signing of Upgrade and Escrow Agreements has raised concerns among stakeholders. Refinery operators warn that prolonged delays may discourage future investment and slow down planned infrastructure upgrades worth billions of rupees.
The industry has therefore requested the government to immediately finalize and execute the pending agreements so that refinery modernization projects can proceed without additional financial burdens. They argue that timely implementation will reinforce investor confidence and demonstrate the government’s commitment to supporting strategic industrial development.
Energy analysts believe that resolving the issue promptly would benefit both the government and the private sector. A transparent and predictable policy environment is considered essential for attracting long-term investment in Pakistan’s energy industry and ensuring sustainable fuel security in the years ahead.
With Pakistan continuing to focus on strengthening its energy sector, stakeholders are hoping that the remaining procedural hurdles will be removed quickly, allowing refinery upgrades to move forward and contribute to the country’s broader economic and industrial growth.
