Pakistan's Oil Refineries Agree to $6 Billion Modernisation

Four of Pakistan’s leading oil refineries reached a significant milestone on Thursday by signing agreements for a long-anticipated upgradation project, channeling nearly $6 billion into modernising the country’s refining sector and enabling the production of Euro-V standard fuels.

Attock Refinery Limited, National Refinery Limited, Cnergyico Pakistan Limited, and Pakistan Refinery Limited are the companies that signed the agreements. Pakistan’s largest refinery, Parco, is also expected to sign on in the near future.

The upgrades are projected to dramatically cut furnace oil output, decrease the need for imported petroleum products, and enhance the country’s capacity to meet its energy requirements using locally refined fuels.

Industry estimates suggest these refinery improvements could help Pakistan save around $1.5 billion per year in foreign exchange by reducing its reliance on fuel imports.

Adil Khattak, CEO of Attock Refinery Limited and chairman of the Energy Committee of the Overseas Investors Chamber of Commerce and Industry, described the deal as the outcome of nearly seven years of policy development. He noted the process began with the first draft of the Refining Policy in December 2019, receiving approval in August 2023 before reaching implementation this week.

Khattak emphasised that recent global events have highlighted the significance of domestic refining capacity as a key national resource. He commended Federal Minister for Petroleum Ali Pervaiz Malik, the Petroleum Division, and other relevant authorities for their role in overcoming obstacles and advancing the policy to this stage.