SIFC to address the challenges facing refineries

The Special Investment Facility Council (SIFC) called on an emergency meeting to quickly meet the challenges facing the oil industry, which has stopped work on $ 6 billion refining projects.

Petroleum marketing companies (OMCS) face losses for months due to sales tax exemption. Caused a loss of 34 billion Rs in them during the last financial year-2024-25.

Although the government later resulted in a mechanism to recover the loss, the issue of sales tax exemption remained unresolved.

Now, the SIFC Apex Commission has called on an emergency meeting on September 18 to examine the challenges facing the oil industry. Sources told Express Tribune that a meeting, chaired by APEX SIFC Commission Secretary, will discuss the tax holidays.

According to a relief mechanism, the government agreed to impose a 5% general sales tax (GST) on the 2025 funding bill to pave the way for smooth work on refinery upgrades. However, the government has failed to fulfill its commitment.

The industry has expressed concern about the absence of a tax exemption for sales on oil -funding bills, which has jeopardized $ 6 billion worth of investment plans to upgrade refineries for environmentally friendly.

The Oil Companies Advisory Council (OCAC) – an industry lobby – has already warned the government that continuing the breach of tax sales on the FY26 budget threatens the viability of their businesses. It has undermined the confidence of investors, who may hesitate to provide funding for scheduled projects.

Industry players say they are not in accordance with the broader goals of Pakistani Brownfield 2023 oil refinement. Foreign investors also expressed serious concerns due to sales tax exemption, holding back their investments.

The government has allowed the oil industry to charge RS1.87 per liter in order to recover the losses caused by sales tax holidays. He also pledged to resolve the issue by imposing up to 5% tax on sales on the FY26 budget. However, she did not respond to her commitment.

The OCAC president, in a letter sent to the Ministry of Energy (Division Petroleum), called for the abolition of sales tax exemption, while conveying his deep concerns and strong protest over the continuation of GST holidays in the financial bill.

While the industry recognizes the temporary relief of the government through the recovery of the impact of the GST in the form of a margin of balancing domestic commodities (IFEM), effective since May 16, 2025, “there remains a temporary measure with intrinsic consequences,” he said.

The OCAC president emphasized the need to immediately withdraw GST exemption and replacement with a sales tax mechanism that allows the input tax to be fully adjustable. “This is the only durable solution that will restore financial stability, tax neutrality and regulatory clarity in the field, failing, the investment of $ 6 billion in the Pakistan refinement of the Brownfield refinement,” he said.