Refiners get 45 days to save their tariff cushion

Pakistan's Petroleum Division has revised the incentive rules for the country's five existing oil refineries, according to Mettis Global. The September 10 amendment to the 2023 refining policy obliges every refiner to hand back benefits already claimed and to qualify again, whether or not it had signed an upgrade agreement earlier. Refiners have a 45-day window to conclude a new agreement, and a tighter timetable applies to those that stay unsigned.

Under the revised terms, the seven-year incentive period is measured from the date each refiner signs the new agreement. Duty on high-speed diesel drops to 2.5% for refiners still unsigned by October 1, 2026, and it is withdrawn completely from November 15, 2026 for those that never sign. The earlier February 2024 change had given refiners until October 22, 2024 to sign, and a number of them failed to meet that date.

Mettis Global notes that ARL, NRL, PRL and Cnergyico are publicly traded, while PARCO is not. The publisher describes the signing decision as a near-term catalyst with binary outcomes, since signing secures a seven-year deemed duty benefit on motor gasoline and diesel plus a ring-fenced account for upgrade capital. Refiners that stay out would lose their remaining duty protection and the waiver to keep selling non-Euro-V fuel, and the report says their OGRA licence is exposed.