Energy & Resource | August 2026 | 4 min read
⚡ Quick Takeaways
- Five domestic refineries are preparing upgrades worth about $4.5 billion to $5 billion.
- The amended policy gives refineries 45 days to sign implementation agreements.
- Projects aim to reduce furnace oil, improve product value and move toward Euro V fuels.
- PRL and Cnergyico are planning the largest capacity expansion projects.
- Financing, detailed engineering and timely execution remain the next major tests.
Pakistan’s long delayed refinery modernization program is finally moving toward implementation, with five major local refineries preparing multibillion-dollar upgrades. The plan could reshape the country’s fuel supply chain by reducing low-value furnace oil, improving fuel quality and lifting domestic refining capacity.
| $4.5bn-$5bn | 45 days | 5 refineries |
| Planned total investment | Deadline to sign agreements | Covered by the upgrade push |
Refinery Agreements Move Closer To Signing
The developments cover Pak Arab Refinery Company, Pakistan Refinery Limited, Attock Refinery Limited, Cnergyico Pakistan Limited and National Refinery Limited. The government is working to finalize implementation agreements with all five companies, with signing expected at the same time during a high level ceremony attended by Prime Minister Shehbaz Sharif.
Under the recently amended Brownfield Refineries Upgradation Policy, refineries now have 45 days to sign their implementation agreements, compared with the previous 60 day period. The change is meant to push companies from policy approval and internal planning toward binding project timelines.
The program matters because Pakistan’s older refineries have historically produced a large share of furnace oil, a fuel that has lost demand as power generation has shifted away from it. Modern upgrades can convert more of each crude barrel into higher-value petrol, diesel and cleaner fuels.
Parco And PRL Lead Early Upgrade Commitments
Pak Arab Refinery Company, the country’s largest refinery, has agreed to move ahead with a $600 million green fuel project after carrying out two studies on the best modernization option. The company is jointly owned by Pakistan and the United Arab Emirates under a 60 percent and 40 percent shareholding structure.
Parco has already reduced furnace oil’s share in its output from about 20 percent to 14 percent through operational steps. The first phase of the green fuel project is expected to reduce that share further to around 10 percent to 11 percent, while the second phase aims to eliminate furnace oil production entirely.
Pakistan Refinery Limited is preparing one of the biggest projects in the program. Its planned $1.8 billion to $2 billion bottom of barrel project is designed to eliminate furnace oil production and double crude refining capacity from 50,000 barrels per day to 100,000 barrels per day.
| Refinery | Planned Investment | Main Upgrade Goal |
| Parco | $600 million | Green fuel project, Euro V shift and lower furnace oil output |
| PRL | $1.8bn-$2bn | Bottom of barrel project and capacity rise to 100,000 bpd |
| ARL | About $600 million | Euro V fuel, catalytic reformer, diesel and kerosene upgrades |
| Cnergyico | $1.2 billion | Green fuel, bottom of barrel work, capacity rise and new SPM |
| NRL | $300m-$800m | Hybrid project, Euro V progress and possible capacity rise to 70,000 bpd |
| Context: These agreements would be a major step, but signing is not the same as financial close, EPC award or completed construction. |
ARL, Cnergyico And NRL Prepare Separate Paths
Attock Refinery Limited is ready to sign its agreement with the Petroleum Division for an approximately $600 million upgrade first announced in 2023. The project includes a Continuous Catalytic Reformer, upgrades to the Diesel Hydro Desulphurising Unit, a Kerosene Hydrotreating Unit, additional storage, utilities and a biofuel facility required under the amended policy.
Cnergyico Pakistan Limited, the country’s largest private refinery, is planning a $1.2 billion investment covering green fuel production, a bottom of barrel project, higher refining capacity and a new Single Point Mooring facility. Its crude refining capacity is expected to rise from about 156,000 barrels per day to around 200,000 barrels per day.
National Refinery Limited is still assessing the final shape of its modernization project. It is considering a hybrid green fuel and bottom of barrel project costing between $300 million and $800 million. The refinery has already achieved Euro V high speed diesel production, while work continues on motor spirit and other products.
| Positive Signal: Cleaner fuel projects can reduce low-value output and help refineries produce more petrol and diesel from the same crude base. |
Financing And Execution Remain The Hard Part
The investment plan is large for Pakistan’s financial market. Recent industry comments reported by Arab News indicate that refineries may need foreign lenders and investors because local banks and capital markets have limited appetite for projects of this size.
That makes policy certainty important. Investors will want confidence that the fiscal and regulatory framework will remain stable over the life of these projects. They will also look at foreign exchange availability, debt terms, engineering design, contractor selection and the commercial return from cleaner fuels.
For consumers, the upgrade program will not deliver immediate price relief. Its real value is structural. If completed, it could improve local fuel quality, reduce furnace oil dependence, support higher domestic refining capacity and make Pakistan’s fuel supply chain less exposed to imported finished products over time.
| Caution: The biggest risk is delay after signing. The program still needs financing, detailed engineering and disciplined project delivery. |
Disclaimer: This article is based on available media reports and provided details. It is for information only and should not be treated as investment advice.
