Islamabad: The Consultative Council of Oil Companies (OCAC) urged Prime Minister Shahbaz Sharif to address two decisive issues that affect the oil sector in Pakistan: canceling the exemption from sales tax on petroleum products and delayed review of the margins of oil marketing companies (OMCS).
OCAC stressed the urgent necessity to resolve these challenges to ensure the financial feasibility of the industry and fuel supply without interruption.
In a letter to the Prime Minister, the President of OCAC M. Adel your footsteps, the dire repercussions of these issues. He called on the government to take immediate action, stressing the need for a quick solution to avoid more financial pressure on the sector. OCAC also requested an urgent meeting with the Prime Minister to discuss these matters, warning that the continuous delay may endanger the industry.
The letter indicated that the Finance Law 2024 re -classified the setting of sales tax for petroleum products from zero to exempt supplies. This re -classification process led to the lack of allowing input tax claims to sales, which led to a sharp increase in operational and capital costs. According to OCAC, this procedure undermines the financial feasibility of vital infrastructure and updating the necessary projects to maintain fuel supply without interruption.
Despite the seven -month continuous follow -up with the Ministry of Energy and Petroleum, the OGRA Authority, the Federal Council for Revenue, the Ministry of Finance, and the Eastern Private Investment Council, the problem is still without a solution. OCAC warned that this continuous exemption threatens the goals of the policy of developing the Brownfield refineries, which was approved in August 2023 under the leadership of the government.
The council also raised concerns about the delay in reviewing OMC margins, which was scheduled to be entitled to September 2024. The review proposal submitted in June 2024 takes into account the critical cost components, including financing costs to keep the stock cover for 20 days, sales tax, and expenses Operating. , And the costs of delay. OCAC stated that the lack of amendment in a timely manner may cause significant financial pressure on operating management companies and stressed that the immediate review is necessary to prevent further losses.
The letter stated: “We have no choice now but to ask for your support and request an urgent meeting with your esteemed sovereignty to discuss and solve these critical issues.”
The Oil Consulting Council (OCAC) is an independent organization that includes refineries, oil marketing companies and the pipeline company. Its primary role is to represent the oil industry in various governmental and non -governmental forums to ensure the sector’s sustainability and its ability to continue.