Pakistan is preparing for more than $6 billion in investment to modernize five existing oil refineries. The opportunity is significant, but success will depend on what Pakistan gets in return: more domestic petrol and diesel, less furnace oil, lower dependence on imported refined products, greater refinery efficiency and measurable foreign-exchange savings.

The five refineries covered by the programme are Pak-Arab Refinery Limited (PARCO), Pakistan Refinery Limited (PRL), National Refinery Limited (NRL), Cnergyico and Attock Refinery Limited (ARL). Pakistan has around 450,000 barrels per day of installed refining capacity, equivalent to about 20.5 million tonnes annually, yet actual refinery utilization has been around 10 million tonnes. The problem is not simply ageing plants; existing refineries are also not sufficiently aligned with changing demand.

Pakistan increasingly needs petrol and high-speed diesel, while demand for furnace oil has weakened. Modernization must therefore change the product mix, not merely increase nominal capacity. More importantly, the investment must translate into higher utilization and commercially sustainable refinery operations.

The government has pursued refinery upgrades for several years. The Oil Refining Policy was notified in 2023 and amended in 2024. The latest amendments were approved by the Economic Coordination Committee (ECC) in July 2026 and subsequently ratified by the Cabinet, paving the way for........

© The Friday Times