IMPACT OF REMOVAL OF DEEMED DUTY

Impact of removal of deemed duty


At the moment refining capacity of Pakistan is 13.5m tons per annum whereas the total consumption is 18m tons during Year 2008. Gap between the demand & supply is met through imports; which is having its toll on the national kitty due to the burgeoning amount of oil import bill. The total oil import bill is US$13Billion 2008 up 78% over US$7.3Billion 2007. Removal of deemed duty will have a negative impact on the refining sector as it is a significant source of revenue for the refineries. It’s removal or reduction will make refineries to put on hold their expansion plans and those refineries that are under construction or plan to enter Pakistan may decide to invest else where making the country to continue to dependent on oil imports.