ISLAMABAD, Jan 19: The government has decided, in principle, to offer an incentive package for investment in the oil and gas sector through its Petroleum Policy 2006 to be unveiled in June, it is learnt. Informed sources told Dawn on Thursday that the petroleum and natural resources ministry had hired IHS-Energy — a global consulting firm — to prepare the petroleum policy.

The consultants have been asked to finish the job till March in consultation with the government, oil and gas companies and other stakeholders.

The sources said the government had planned to finalize the policy with input of various departments so that its certain parts could be implemented in next budget.

The country, at present, has a petroleum policy of 2001. But oil and gas companies have long been expressing dissatisfaction over it owing to a cap on local gas producer prices and demanding at least 25 per cent increase in the prices.

The industry has also asked the government to provide guarantees and tax exemptions to accelerate gas production.

The government plans to increase the gas production to meet energy needs of the growing economy as it foresees a shortfall beyond 2007.

The industry looks forward to improvement in terms of income tax, royalty, production bonus, land lease rentals, import duties on service industries, payroll taxes, WWF and WPPF, and an increase in gas price for the incremental production.