Reporting snapshot · 24 September 2026. Four of Pakistan's five major refineries formally signed upgradation agreements with the government on 24 September, unlocking an estimated $5 billion of investment over five years under the Brownfield Petroleum Refining Policy 2026. The fifth refinery, Pak-Arab Refinery (PARCO), had not yet signed; its participation would take the programme's investment envelope to about $6 billion. Production figures below are feasibility-based projections and may change after detailed engineering.
What happened
Four of Pakistan’s five major oil refineries signed long-delayed upgradation agreements with the government on Thursday, 24 September, formally moving a modernisation programme worth about $5 billion into its implementation phase.
Attock Refinery Limited (ARL), National Refinery Limited (NRL), Pakistan Refinery Limited (PRL) and Cnergyico Petroleum signed the agreements with Inter State Gas Systems (ISGS), a subsidiary of the Petroleum Division designated to execute the contracts and monitor implementation, according to Dawn. The three listed refiners — ARL, NRL and Cnergyico — disclosed the signing to the Pakistan Stock Exchange in separate regulatory filings.
The agreements were signed under the Brownfield Petroleum Refining Policy 2026, which the Cabinet Committee on Energy approved in the last week of July after a deadlock that spanned more than seven years. The policy supersedes earlier refining policies and provides fiscal incentives, tariff protection and other measures to encourage the country’s existing refineries to modernise rather than build new plants. The fifth refinery, Pak-Arab Refinery (PARCO), a joint venture between Pakistan and Abu Dhabi, had not yet signed. Its managing director said it would sign within the stipulated timelines, and its participation could raise total investment to about $6 billion.
What the upgrades will change
Under the programme, the refineries are expected to produce cleaner Euro-V fuels — which permit a maximum of 10 parts per million (ppm) of sulphur in petrol and diesel, against 50 ppm under Euro-IV standards — and to shift their product mix away from low-value furnace oil.
Combined feasibility-based projections reported by Dawn and Profit by Pakistan Today point to substantial changes in the national output slate once the projects are completed:
- Total petrol production would rise by about 72 per cent, to 18,400 tonnes per day (TPD) from 10,700 TPD.
- High-speed diesel output would increase by about 39 per cent, to 29,520 TPD from 21,240 TPD.
- Furnace oil production would fall by about 63 per cent, to 5,714 TPD from 15,417 TPD.
Cnergyico Vice Chairman Usama Qureshi clarified that these figures represent the combined output of the existing domestic refineries after their respective upgrades, rather than targets for any individual plant. Attock Refinery CEO Adil Khattak, who also chairs the energy committee of the Overseas Investors Chamber of Commerce and Industry, called the signing a historic milestone for Pakistan’s refining industry and “arguably the largest coordinated industrial investment programme ever undertaken in Pakistan”. He said industry estimates indicated the upgrades could save Pakistan around $1.5 billion a year in foreign exchange by replacing imported petroleum products.
Incentives and obligations
The policy ties the investment to a package of fiscal incentives. A minimum customs or regulatory duty of 10 per cent applies to imported petrol and diesel for seven years. Eligible refineries receive 10 per cent tariff protection, or deemed duty, on the ex-refinery price of petrol and diesel for seven years from the signing of their agreement and the opening of a joint escrow account with the Oil and Gas Regulatory Authority (Ogra). Of this, 2.5 per cent of the deemed duty on diesel and the 10 per cent incremental incentive on petrol are deposited into upgrade accounts used only for approved modernisation projects. The prevailing 7.5 per cent deemed duty on high-speed diesel continues after the seven-year incentive period for 20 years, or until deregulation, whichever comes first.
In return, the refineries commit to completing their projects within five years and to meeting conditions that include maintaining crude stocks equivalent to at least 14 days of refining capacity at all times, with an additional five days of cover at sea for plants relying on imported crude. These stockholding rules echo the strategic oil-reserves plan the energy ministry circulated to producers and traders in May. The Petroleum Division is required to notify Euro-V fuel specifications within one month of the signing.
Cnergyico Group CEO Amir Abbassciy said the company’s project had been structured in three phases: converting the refinery to produce Euro-V-compliant fuels, reducing furnace oil output, and enhancing capacity. He described the signing as a “remarkable achievement” and a long-awaited milestone for the sector.
Why it matters
Pakistan imports a large share of its refined petroleum products, which exposes the economy to international price swings and puts pressure on its foreign-exchange reserves. The refinery programme is intended to raise the share of locally produced petrol and diesel, cut furnace oil output, and bring domestic fuel quality in line with Euro-V environmental standards. The agreements also lock in tariff protection for the refining sector for seven years, a measure that will affect fuel pricing and the competitiveness of imported products during the build-out.
The programme had been stalled for years over the commercial viability of the projects and disagreements about incentives. Its revival under the amended policy, approved in July and notified in September, comes as Pakistan manages high fuel prices and a fuel-relief scheme, and as it pursues external financing for energy projects, including the possible US Export-Import Bank support for refinery upgrades that Finance Minister Muhammad Aurangzeb raised in New York on the same day.
What is still uncertain
The biggest open questions are financing and timing. The $5 billion figure is the government’s estimate of the investment the four signed refineries will attract; PARCO’s participation could add roughly another $1 billion. The production projections are feasibility-based and may change after front-end engineering design is completed for each plant. Financing arrangements, project scope and completion timelines for the individual refineries have not been disclosed. The agreements also set an October 1 deadline for the remaining refiners under the amended policy, with financial consequences for those that miss it.
Sources & reporting notes
This is a synthesis of published material, not eyewitness reporting. Sources were reviewed on 24 September 2026. The account rests on Dawn's report of the signing and the policy's terms, Profit by Pakistan Today's reporting and quotes, and the regulatory disclosures the three listed refiners made to the Pakistan Stock Exchange.
- Dawn — "4 local refineries sign $5bn upgradation deals with govt to improve quality, production"24 September 2026 · The signing of the four agreements with ISGS, the production projections, the fiscal regime and stockholding obligations, and Adil Khattak's comments.
- Profit by Pakistan Today — "Four refineries seal $5bn modernisation deals to boost Pakistan's energy security"24 September 2026 · Independent reporting of the agreements, the production projections, the incentive mechanism, PARCO's position, and the comments of Usama Qureshi and Amir Abbassciy.
- Profit by Pakistan Today — "Cnergyico signs refinery upgrade deal with government"24 September 2026 · Carries Cnergyico's regulatory disclosure to the PSX confirming the signing date and the agreement's terms under the amended policy.
