KARACHI: The government has taken a major step toward modernizing Pakistan’s oil refining sector, with upgrade agreements involving all five local refineries expected to be signed at the beginning of next month, Petroleum Minister Ali Pervaiz Malik said.
The planned refinery upgrades are expected to attract more than $6 billion in investment, increase domestic production of petrol and diesel, reduce reliance on imported fuels and strengthen the country’s energy security.
The petroleum minister held separate meetings in Karachi with the management of the country’s five oil refineries to review their modernization plans, financial and operational performance, and broader energy security concerns.
Implementation of the Brownfield Refinery Upgrade Policy was also discussed during the meetings.
According to the minister, all five refineries PARCO, Pakistan Refinery Limited (PRL), Attock Refinery, National Refinery Limited (NRL), and Cnergyico are ready to sign agreements under the policy. The signing of the five agreements is expected to take place early next month.
More than $6 billion investment expected
Malik said the refinery modernization projects were expected to bring more than $6 billion in investment into Pakistan.
He described the modernization of the country’s refineries as essential for the long-term sustainability of the refining sector, saying upgraded facilities would improve Pakistan’s ability to produce Euro 5-standard petrol and other refined fuels locally.
The upgrades are also expected to improve refinery efficiency and increase the share of higher-value petroleum products produced domestically.
Focus on reducing fuel imports
The government expects higher domestic refining capacity and improved technology to increase local production of petrol and diesel.
Malik said greater domestic production could help reduce Pakistan’s dependence on imported fuel, potentially saving valuable foreign exchange.
He added that increased local production could also help bring down petrol and diesel prices in the future, although the impact on retail prices would depend on several factors, including international oil prices, taxes, duties, exchange rates and other components of the domestic fuel-pricing mechanism.
Government pledges support for refineries
The petroleum minister said the government would provide all possible assistance to refineries in resolving issues that arise during implementation of the upgrade policy.
He termed refinery modernization vital for meeting Pakistan’s energy needs, increasing domestic fuel production and strengthening the country’s energy sector over the long term.
Officials said the completion of preparations by all five refineries and the signing of the upgrade agreements would mark the first major practical step toward implementing the Brownfield Refinery Upgrade Policy.
Hub oil city project also discussed
During the meetings, PARCO also briefed the petroleum minister on progress regarding a proposed Oil City project in Hub.
Officials said the project is aimed at strengthening Pakistan’s energy security, improving commercial and trade linkages, ensuring reliable fuel supplies and promoting economic activity.
The government believes that refinery modernization, combined with related infrastructure projects, could make the domestic fuel supply chain more resilient while reducing the country’s dependence on imported petrol and diesel.
Malik said the planned upgrades would not only help stabilize domestic fuel supplies but could also improve energy security, reduce import dependence and provide broader benefits to the national economy.
