Key Points
- Cnergyico, Attock Refinery and National Refinery sign agreements with state-owned ISGS
- Five-refinery programme is expected to attract about $6 billion in investment
- Upgrades target Euro-V fuels, lower furnace oil output and greater energy security
ISLAMABAD: Pakistan’s three major oil refineries — Cnergyico Pk, Attock Refinery Limited and National Refinery Limited — have signed agreements with Inter State Gas Systems (ISGS), a state-owned gas company, for projects to upgrade their existing plants under the government’s amended refinery policy.
The listed companies disclosed the development in separate notices to the Pakistan Stock Exchange on Thursday. The refineries signed the agreements in Islamabad with ISGS, which the Ministry of Energy’s Petroleum Division designated as the implementation entity for the refinery upgrade programme.
The agreements follow the Pakistan Oil Refining Policy for Upgradation of Existing/Brownfield Refineries, introduced in 2023 and amended in February 2024 and August 2026. The latest version was formally notified on Sept 10, bringing the revised framework into effect.
READ ALSO: Pakistan Refineries Ready for $6bn Modernisation
Cnergyico said the agreement it signed covers implementation of its approved refinery upgrade project under the policy. The company said it remained committed to modernising its refinery and appreciated government measures aimed at facilitating investment in the refining sector.
Attock Refinery stated the agreement would help modernise its existing infrastructure, improve operational efficiency and product quality, and enable production of Euro-V standard fuels.
National Refinery said it signed the agreement, representing a breakthrough in efforts to modernise its facilities, strengthen supply-chain resilience and contribute to a more sustainable and secure energy system.
The programme covers Pakistan’s five major refineries — Pak-Arab Refinery Limited, Pakistan Refinery Limited, National Refinery Limited, Cnergyico and Attock Refinery. Together, they have crude processing capacity of about 350,000 barrels per day. The government expects the projects to attract about $6 billion in investment over the coming years.
The upgrade programme aims to change the product mix of the ageing refineries. The projects are designed to increase production of higher-value petrol and diesel by achieving Euro-V fuel standards and reducing the output of furnace oil, a lower-value product that has faced weak domestic demand.
The policy also seeks to reduce Pakistan’s dependence on imported petroleum products. Petroleum Minister Ali Pervaiz Malik has said modernisation would enable the country to produce more Euro-5 standard fuels and reduce reliance on imported petrol and diesel.
Pakistan anticipates $1.5 billion annual savings
Industry estimates suggest the completed projects could eventually save Pakistan about $1.5 billion annually in foreign exchange by replacing some petroleum imports with domestic production.
Pakistan spent about $16.9 billion on petroleum imports last fiscal year, underscoring the refining sector’s importance for the country’s external account and energy security.
The programme has taken several years to reach implementation. The government approved the original policy in 2023. However, disagreements over fiscal incentives, project economics and the mechanism for implementing the agreements delayed investment decisions.
The government amended the policy in February 2024 and again in August 2026. It subsequently notified the revised framework on Sept 10 and designated ISGS to implement the agreements on behalf of the Petroleum Division.
Under the new arrangement, ISGS will oversee implementation, monitor project milestones, manage refinery upgrade accounts and administer incentives provided under the policy. The projects are expected to be completed within five years.
The government has also tightened the financial consequences for refiners that delay signing. The Federal Cabinet set Oct 1, 2026, as the deadline for executing the Upgrade Agreements. Refineries failing to meet the deadline face reductions in the deemed duty available on high-speed diesel.
Under the amended framework, the existing incentive structure provides tariff protection for petrol and diesel while requiring part of the additional incentive to be deposited into accounts dedicated to financing the upgrade projects.
