Q1FY27 earnings could remain strong: HSD margin cap may limit refinery upside: Topline

Business Recorder reported that Topline Research expects Pakistan Refinery Limited (PRL) to post a profit of Rs8-10 billion in the first quarter of FY27. Attock Refinery Limited (ATRL) could book Rs10-15 billion over the same period, according to the brokerage's estimates. Both forecasts come as the government introduced a diesel margin cap aimed at cushioning households against costlier fuel.

The government has set a USD42 per barrel ceiling on the diesel crack spread, a figure that leaves out freight and insurance. Topline noted that this spread averaged USD65.03 per barrel over the previous fortnight and USD55.6 since July 2026, against a 10-year average of USD15.8. The cap is due to last two months, though authorities could revisit it sooner if geopolitical conditions ease and global petroleum prices fall.

Topline assumed HSD spreads of USD53-62 per barrel, MS spreads of USD31-33 and furnace oil at negative USD18-22 per barrel, all including premiums and freight. Its figures leave out inventory gains and losses. Even with the cap, Topline said refiners could still generate sizeable profits because the capped spread stays far above its historical average, and the higher margins may help local refineries fund the equity share of upgrade projects that are part of the new refinery policy.