Page 278 - Records of Bahrain (7) (ii)_Neat

668 Records of Bahrain

While the now terms had not yet boon completely

agreed with tho Saudi Govornmont there appeared
to bo virtually no doubt that this particular
item would be accepted by both parties, In these
circumstances the Bahrain Petroleum Company
were favourably disposed to the idea of making

a similar 'arrangement in Bahrain cind were actively
studying its implications. Tho proposal undor
consideration was that, instead of the present
import tax of 2.63 cents a barrel on imported

oil, the Bahrain Petroleum Company should charge
a refinery processing fee of 8 cents a barrel,
of which the Bahrain Government v/ould get half
i in tax. This v/ould raise t.he Bahrain Government’s
revenue on refining operations from 2.63 cents

to 4 cents a barrel and would put them on exactly
tho same footing as Saudi Arabia in this respect.
Among the implications which the Company believed
had to bo studied were the effect on the agreement
between them and Her Majesty’s Treasury as regards

the use of sterling funds, and a change in tho
Bahrain Government income tax law (which is applied
to the Company under Queen’s Regulation No. 4
of 1952), since in its present form this appears
to apply only to the production and not tho
processing of oil.

/2.

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