Petroleum Consumption, Extraction, Imports Increase By 17.6% In Nine Months

ISLAMABAD, Jul 5 (UrduPoint / Pakistan Point News - 5th Jul, 2021 ) :The petroleum products' consumption, extraction and imports have witnessed around 17.6 per cent increase during first nine months (July-March) of the last fiscal year, proving the fact that industrial sector was getting boom besides accelerated trade activities in the country.

During the period under review, the petroleum consumption witnessed an increase from 12.5 million ton (MT) to 14.7 MT, posting a growth of 17.59 percent as compared to same period of the corresponding year. While the crude oil's local extraction and imports reached 68.9 Million Barrels (MBL) from 58.6 MBL with 17.57 percent surge, according to an official document available with APP.

While share of the imports remained 48.2 MBL oil as compared to 38.8 MBL of same period of last year.

The government has added oil storage of 38,579 metric tons in the country's logistics during the period of Jul-Mar at the cost of Rs5,786.8 million.

During the period under review, as many as four licences for construction and one licence for operation of Lube Oil Blending, Reclamation and Grease Plants were issued.

Similarly, five licences were granted for setting up Lubricant Marketing Company (LMC) and three operational licenses for LMCs. These provisions of licences would enhance the domestic supply of crude oil and will decrease import bill.

Meanwhile, a senior official privy to petroleum sector developments told APP that a new oil refining policy, with special focus on attracting maximum investment in this sector, would soon be presented before the Federal Cabinet for its approval. "It will help make the country self-reliant in oil refining sector," he said The policy would allure huge investment in the oil refining sector by offering tax rebate to the local and foreign investors for up-gradation and establishment of new deep-conversion refineries.

Under the new policy, the import duty on motor gasoline (from 5% to 10%) and diesel (from 13% to 10%) would be applicable as tariff protection for refineries, effective from January 1, 2022 to December 31, 2026.

Besides, there would be a 10-year income tax holiday for up-gradation, modernization and expansion of the existing refinery projects; and a 20-year income tax holiday for all new deep-conversion refinery projects of a minimum capacity of 100,000 Barrels per Day (BPD).

As per the policy, the product pricing formula of refineries would be based on 'True Import Parity price,' and there would be zero per cent duty on import of crude oil from fiscal year 2023-24.

The policy would also offer exemption from customs duties and other levies on import of any equipment and machinery for up-gradation and establishment of new oil facilities.