ECC approves refinery upgrade agreements, PKR 75 billion fuel relief scheme

Pakistan's Economic Coordination Committee (ECC) approved draft refinery upgrade agreements and a PKR 75 billion fuel relief scheme on Monday in Islamabad. Finance Minister Muhammad Aurangzeb chaired the meeting, which also addressed sugar exports, shipping sector restructuring and oil marketing company claims. The refinery agreements pave the way for five-year upgrade projects, while the relief scheme targets lower-income consumers after a sharp rise in fuel prices.

What did the ECC approve on Monday?

The Economic Coordination Committee cleared draft upgrade agreements for Pakistan's existing oil refineries under the 2023 refining policy, alongside a PKR 75 billion fuel relief scheme for lower-income consumers. It also approved measures on sugar exports, shipping sector restructuring and compensation for oil marketing companies during the same meeting.

What are the refinery upgrade agreements?

The agreements cover Pakistan's brownfield refineries under the 2023 refining policy, as amended in August 2026. They set up a framework for implementing and monitoring the upgrade projects and their associated incentives, according to the Finance Division. All refineries are expected to sign the agreements later this month, subject to Prime Minister Shehbaz Sharif's availability. The projects are expected to take five years to complete.

How does the Prime Minister's Fuel Relief Scheme work?

The scheme targets non-commercial users following a sharp rise in petroleum prices. Owners of two- and three-wheelers will receive PKR 500 per week, equal to five liters of fuel at PKR 100 per liter. Cars up to 800cc will get PKR 1,000 every 10 days, based on a monthly allocation of 30 liters at PKR 100 per liter.

Relief is limited to one vehicle per user or owner. The Ministry of Information Technology and Telecom will run a Fuel Pass System to manage the subsidy digitally. The ECC approved PKR 75 billion as a technical supplementary grant to fund the scheme.

What other economic decisions did the ECC make?

The committee approved a framework to restructure ownership and management control of Pakistan National Shipping Corporation, based on recommendations from a committee led by the privatization minister. It also approved compensation for oil marketing companies' unadjusted input sales tax claims from July 2025 through June 2026, to be settled through the Inland Freight Equalization Margin while verification continues.

The ECC approved the export of 200,000 metric tons of surplus sugar, following recommendations from the Steering Committee on Sugar. The approval includes safeguards to protect domestic price stability and supply. Separately, the committee deferred a Science and Technology Division proposal on used vehicle import standards, asking for input from a committee reviewing the Engineering Development Board's inspection regime before resubmission.

Why did the ECC approve bulletproof vehicles for the SCO summit?

The committee approved PKR3 billion through a technical supplementary grant to buy 15 bulletproof sedans for the Shanghai Cooperation Organisation Council Summit. Pakistan is scheduled to host the summit in Islamabad in September 2027. The ECC said the vehicles are necessary for the security of visiting heads of state, citing arrangements seen at the recent SCO summit in Kyrgyzstan.