Lack of oil refinery policy stopped Saudi investment, PAC told

ISLAMABAD: The lack of an oil refinery policy has stopped the federal government from making progress on $8 billion investments by Saudi Arabia, ARY News reported on Wednesday.

It was revealed during the session of the Public Accounts Committee (PAC) by the concerned officials that Pakistan failed to make progress on Saudi Arabia’s $8 billion investment plan due to a lack of an oil refinery policy.

Saudi Crown Prince Mohammed bin Salman had announced to establish an oil refinery during his visit to Pakistan in February 2019.

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The additional secretary of the Petroleum Division apprised the PAC that Saudi Arabia had announced to establish oil refineries in Hub and Gwadar. A draft oil refinery policy was prepared last month after the efforts of over one year, whereas, two more months are required to finalise it, the PAC told.

According to the chairman of the Oil and Gas Regulatory Authority (OGRA), the last oil refinery had been established in Pakistan in 2002. The concerned officials briefed that Pakistan was importing up to 70 per cent of fuel resources including petrol and diesel due to lacking the capacity of the oil refinery.

The Petroleum Division officials said that only 30 per cent of finished products were being acquired from the refineries. The additional secretary of the Petroleum Division said that the country used to receive only crude oil on deferred payments from Saudi Arabia but not petrol and diesel.

READ: SAUDI ARABIAN REFINERY TO REDUCE OIL IMPORT BILL BY $1.2 BN: PETROLEUM MINISTER

It was also learnt that India could continue cheap oil purchases at 100 per cent discounted rates due to the old agreements, whereas, there was no agreement signed between Pakistan and Russia for oil purchases.

During Saudi Crown Prince Mohammed bin Salman’s visit to Pakistan in 2019, Saudi Arabian investors showed keen interest to invest in Pakistan’s petroleum sector besides pledging investments worth billions of dollars in different sectors.

Pakistan and Saudi Arabia had also agreed to establish a Joint Working Group (JWG) for setting up an $11 billion oil refinery and petrochemical complex at the Gwadar Port.

The establishment of the refinery and petrochemical complex in Pakistan would help cut down the annual oil import bill by $1.2 billion.