Oil Refinery Projects Begin in Pakistan 2025

Pakistan's oil refining sector is set for a major transformation, with multiple refineries planning multi-billion-dollar upgrades to modernize operations and reduce reliance on imported fuels. These developments are expected to boost local energy production, improve fuel quality, and contribute to economic stability.

• Oil refineries across Pakistan are initiating major plant upgrades worth billions of dollars

• Upgrades will bring fuel quality up to Euro-5 standards, reducing environmental pollution

• Local production will rise, cutting the need for expensive fuel imports

• Government incentives are driving private investment in refining capacity

• The move is expected to create thousands of jobs and attract foreign investment

The primary goal of these upgrades is modernization. Most oil refineries in Pakistan have outdated technology, resulting in low-quality fuel production and high operational inefficiencies. With increasing demand for cleaner and more efficient fuels, both the government and private sector have realized the urgent need for change.

The shift towards Euro-5 fuel standards is part of Pakistan’s commitment to reduce its carbon footprint and meet international environmental benchmarks.

Currently, Pakistan imports a significant portion of its refined fuels, especially high-quality petrol and diesel. Upgrading refineries will allow the country to produce more locally, saving billions in foreign exchange.

Several key players in Pakistan’s oil refining industry are participating in this modernization wave:

Pakistan Refinery Limited (PRL)

• Investment: Over $1 billion

• Upgrade Focus: Conversion to deep conversion refinery, enabling production of Euro-5 compliant fuels.

• Expected Completion: 2026

Attock Refinery Limited (ARL)

• Investment: Estimated $800 million

• Plans: Technological upgrades for enhanced fuel yield and sulfur recovery units.

Byco Petroleum (Now Cnergyico)

• Investment: Multi-phase upgrade plan valued at $1.5 billion

• Strategy: Expand refining capacity and improve environmental controls.

PARCO (Pak-Arab Refinery)

• Collaboration: Partnering with foreign firms for high-efficiency units.

• Vision: Build Pakistan’s most modern refinery complex near Gwadar in the long term.

The Pakistani government has introduced the Refinery Policy 2023, which offers:

• Tax exemptions for upgrading existing facilities

• Duty waivers on imported machinery and parts

• Long-term incentives for new greenfield refinery projects

These policies aim to attract local and foreign investors to the energy sector and make refinery operations more competitive globally.

Upgrading oil refineries isn't just about technology — it brings wide-ranging benefits for the national economy:

By producing more refined products locally, Pakistan can cut down fuel imports, which are one of the country’s largest expenses.

These multi-billion-dollar projects are expected to create thousands of direct and indirect jobs in construction, engineering, logistics, and support services.

Improved infrastructure and clearer policy incentives can attract foreign direct investment (FDI) from international energy giants.

Modern refineries will support downstream industries such as petrochemicals, plastic manufacturing, and chemical processing.

“Pakistan's refinery upgrades will significantly reduce its oil import bill and provide more energy security. It’s a strategic move.”

“Cleaner fuel production is a win-win for both health and climate. This move aligns Pakistan with global sustainability trends.”

Pakistan’s decision to modernize its oil refining infrastructure marks a major shift in its energy policy. With government support, investor interest, and public benefits, these upgrades have the potential to transform the energy sector, reduce environmental damage, and boost the national economy.