4 local refineries sign $5bn upgradation deals with govt to improve quality, production

Dawn reported that four of the five local refineries signed upgradation agreements with the government on Thursday, a step meant to raise fuel quality and output. The projects carry an estimated investment of about $5bn over five years under the Brownfield Petroleum Refining Policy 2026, which was approved in late July. The fifth refinery, Pak Arab Refinery (Parco), has not signed yet, and if it does, total investment is expected to reach $6bn.

Under the policy, petrol output is projected to rise 72 per cent to 18,400 tonnes per day, while high-speed diesel output would climb 39 per cent to 29,520 tonnes per day. Furnace oil production is set to fall 63 per cent to 5,714 tonnes per day, and all refineries must produce Euro-V compliant fuels after upgrading. The policy also sets a minimum 10 per cent customs or regulatory duty on imported petrol and diesel for seven years, along with tariff protection for refineries.

Adil Khattak, CEO of Attock Refinery and chairman of the OICCI Energy Committee, called the signing a historic milestone and said the wait had been costly for the country. Estimates from the industry put the annual foreign exchange saving from upgradation at about $1.5bn. He added that the coming five years will be demanding, as the refineries must turn commitments into financing, engineering and construction.