Pakistan has approved long-awaited changes to its oil refining policy, ending years of regulatory uncertainty that industry leaders say cost the country between USD 1.5 billion and USD 2 billion annually in lost foreign exchange savings, delayed investment and continued reliance on imported petroleum products.
The Cabinet Committee on Energy, chaired by Prime Minister Shehbaz Sharif, approved the revised Oil Refining Policy on Monday. The updated policy is expected to pave the way for refinery upgrades worth an estimated USD 5 billion to USD 6 billion. The projects aim to produce cleaner Euro-V fuels, increase domestic production of gasoline and diesel, and reduce furnace oil output.
The approval marks the end of a policy process that began more than six years ago. The original Oil Refining Policy was introduced on Aug. 17, 2023, amended in February 2024 and later revised after extensive consultations among the government, local refineries, and independent financial and legal advisers.
Attock Refinery Chief Executive Officer Adil Khattak said the amended policy was finally approved after addressing the concerns raised by refineries over issues that could have made the proposed upgrade projects financially unviable.
Khattak, who also serves as chairman of the Energy Committee of the Overseas Investors Chamber of Commerce and Industry, said the repeated delays had imposed a significant cost on the country.
He said every year of delay in upgrading Pakistan’s refineries resulted in losses of between USD 1.5 billion and USD 2 billion, mainly because of continued imports of refined petroleum products and delays in modernizing the country’s refining sector.
