Pakistan’s refining sector has moved another step toward a major modernization program after Cnergyico Pk Limited, Attock Refinery Limited (ARL), and National Refinery Limited (NRL) signed upgrade agreements with Inter State Gas Systems (ISGS).
The agreements were signed on September 24, 2026, under the government’s Pakistan Oil Refining Policy for Upgradation of Existing/Brownfield Refineries, 2023, as amended in February 2024 and August 2026. The Ministry of Energy’s Petroleum Division has designated ISGS as the implementation entity for the amended policy.
The development is part of a wider government program intended to modernize Pakistan’s existing refineries, improve the quality of petroleum products and increase domestic production of cleaner fuels. Government estimates released in August had indicated that the broader refinery modernization program could unlock around $6 billion in investment across the sector.
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Three Major Refineries Sign Upgrade Agreements
The three companies have now formally entered the implementation framework established by the amended refinery policy.
Cnergyico Pk Limited
Cnergyico signed its Upgradation Agreement with the government through ISGS on September 24 after approval under the amended policy.
According to the company’s disclosure, the agreement covers the upgrade of its existing refinery and implementation of its approved refinery upgradation project according to the policy’s terms and conditions.
Cnergyico operates one of Pakistan’s major refining facilities at the Hub area in Balochistan. Its participation brings another large existing refinery into the government’s brownfield modernization framework.
Attock Refinery Limited
Attock Refinery Limited also confirmed that it had executed its Upgradation Agreement with ISGS.
ARL said the agreement represents a step toward modernizing its existing refinery infrastructure. The company has also linked the modernization program with improved operational efficiency and the production of Euro-V standard fuels.
National Refinery Limited
National Refinery Limited has likewise signed its agreement with ISGS.
NRL described the agreement as a significant development in its efforts to modernize its existing refinery infrastructure. The company has said that modernization is intended to contribute to a more sustainable and secure energy future and strengthen supply-chain resilience.
Together, the three agreements represent another stage in the implementation of the government’s brownfield refinery policy.
What Is Pakistan’s Brownfield Refinery Policy?
The Pakistan Oil Refining Policy for Upgradation of Existing/Brownfield Refineries was introduced to encourage existing refineries to modernize and upgrade their facilities rather than relying on older refining configurations.
The policy focuses on several objectives, including:
- Improving the quality of locally produced petroleum products.
- Increasing production of motor gasoline and diesel.
- Supporting cleaner fuels that meet notified Euro-V specifications.
- Reducing production of furnace oil.
- Modernizing existing refinery infrastructure.
- Encouraging investment in Pakistan’s refining industry.
OGRA’s earlier policy documentation described the objective as providing environment-friendly transport fuels according to notified Euro-V specifications while maximizing motor gasoline and diesel production and minimizing furnace oil and other lower-value fuels.
The latest version of the policy was notified by the Ministry of Energy’s Petroleum Division on September 10, 2026, incorporating amendments made in February 2024 and August 2026.
Why Are the Refinery Upgrades Important?
Pakistan’s refining sector has long faced the challenge of operating existing facilities while meeting changing fuel-quality requirements and domestic demand.
Modernization can allow refineries to change their product mix and improve the processing of crude oil.
One major objective of the policy is to increase the production of motor gasoline and diesel while reducing furnace oil output.
The shift matters because refinery output is not limited to petrol and diesel. Depending on the configuration of a refinery, crude oil processing can produce several petroleum products with different market values and uses.
Upgrading processing units can therefore change both the quantity and quality of products produced.
For consumers and the broader economy, the potential effects extend beyond refinery operations. A more modern refining system can influence domestic fuel availability, imports, foreign-exchange requirements and the supply chain for petroleum products.
However, the actual economic effects will depend on how individual upgrade projects are financed, constructed and brought into operation.
Euro-V Fuel Quality Is a Key Target
One of the most important elements of the modernization program is the move toward Euro-V fuel specifications.
Euro-V refers to fuel standards designed around stricter specifications for vehicle fuels and associated environmental performance.
The government policy identifies environment-friendly transport fuels meeting notified Euro-V specifications as one of its objectives.
Attock Refinery has specifically stated that its modernization plans are intended to support production of Euro-V standard fuels.
Moving refinery production toward higher fuel standards requires investment in processing and treatment facilities. It can also require changes to supporting infrastructure and operational systems.
This is why the government’s brownfield program involves more than simply increasing the volume of existing refinery production.
ISGS Gets a Bigger Role in the Refinery Program
A major change under the amended framework is the role assigned to Inter State Gas Systems (ISGS).
In August 2026, the Petroleum Division designated ISGS as the policy implementation entity for the refinery upgradation program. The arrangement followed approval of the amended policy by the Cabinet Committee on Energy and subsequent ratification by the federal cabinet.
Under the implementation framework, ISGS is responsible for functions including:
- Executing Upgrade Agreements.
- Establishing and managing Refinery Upgrade Accounts.
- Monitoring refinery upgrade projects.
- Hiring technical consultants and auditors.
- Verifying project-related requirements.
- Administering incentive payments under the policy.
This gives ISGS a central role in translating the policy framework into individual refinery projects.
The Ministry of Energy’s official policy page confirms that the amended policy was notified in September 2026 and is currently listed among the ministry’s active petroleum policies.
October 1 Deadline Adds Pressure
The government has set October 1, 2026, as the deadline for refineries to execute their Upgrade Agreements.
The deadline is important because financial consequences have been attached to delays.
According to reporting on the government’s policy implementation, refineries that fail to sign the agreements face changes to the deemed duty applicable to high-speed diesel. The government has been using these financial measures to encourage timely participation in the modernization program.
The amended framework therefore combines incentives for refinery modernization with deadlines and financial consequences for companies that do not meet the required milestones.
The agreements signed on September 24 by Cnergyico, ARL and NRL bring three major refiners into the formal agreement stage before the October 1 deadline.
How Much Investment Could the Program Generate?
The government’s Petroleum Division said in August that the modernization agreements were expected to unlock approximately $6 billion in investment across Pakistan’s refining sector.
However, the figures reported for the overall program vary depending on which stage of the agreements is being discussed.
A September 24 report by Dawn said four of the five local refineries had entered formal agreements, with an estimated investment of around $5 billion over five years, while the government has previously referred to a potential total of approximately $6 billion when all five major refineries are included.
That distinction is important.
The three agreements announced by Cnergyico, ARL and NRL should not automatically be interpreted as representing the entire $6 billion investment figure. The larger figure relates to the broader refining-sector modernization program.
What Happens to the Other Major Refineries?
Pakistan’s major refining sector includes PARCO, PRL, NRL, Cnergyico and ARL.
The Petroleum Division said in August that all five had reaffirmed their readiness to sign agreements under the refinery upgradation policy, with the broader program expected to unlock approximately $6 billion in investment.
The September 24 agreements from Cnergyico, ARL and NRL therefore form part of a wider program involving the country’s major refineries.
The status of each company and the timing of its agreement can differ.
Recent reporting indicates that Pakistan Refinery Limited (PRL) has also entered an upgrade agreement, while PARCO has been expected to follow.
This means the sector-wide modernization program is moving through several individual agreements rather than being implemented through one single contract.
What Could the Upgrades Mean for Pakistan’s Fuel Supply?
If successfully completed, refinery modernization could change the composition of locally produced petroleum products.
The government’s policy specifically targets higher production of motor gasoline and diesel and lower furnace oil output.
That could have implications for Pakistan’s dependence on imported refined petroleum products.
However, it is important to distinguish between policy objectives and completed outcomes.
Signing an Upgrade Agreement does not mean the new facilities are already operational. Construction, financing, procurement, engineering, installation, testing and commissioning still have to take place.
The timeline and final production impact will depend on the individual projects.
The Petroleum Division’s implementation framework gives ISGS responsibility for monitoring these projects and administering the relevant upgrade accounts.
A Long-Term Modernization Program
The current agreements follow years of discussion around upgrading Pakistan’s aging refining infrastructure.
The amended policy was approved in 2026 after changes to the original 2023 framework. The Ministry of Energy formally notified the latest version on September 10.
The policy now provides the framework for refineries to move forward with their upgrade projects, while ISGS has been assigned an implementation and monitoring role.
For Pakistan’s energy sector, the significance of the agreements will ultimately depend on whether the planned projects are completed on schedule and deliver the targeted changes in fuel quality and production.
What to Watch Next
Several developments will be important after the September 24 agreements.
Upgrade Agreement Deadline
The October 1 deadline remains a key date for refineries that have not yet completed their agreements.
Project Financing
The individual agreements announced so far do not publicly specify all project-level financing details. How each refinery funds its modernization program will be important for implementation.
Construction and Commissioning
Signing agreements is only the beginning. Engineering, procurement, construction, testing and commissioning will determine when upgraded facilities can actually contribute to production.
Fuel Quality
The extent to which upgraded facilities can produce fuels meeting Euro-V specifications will be another important measure of the program’s implementation.
Domestic Production
The policy’s objective of increasing petrol and diesel production while reducing furnace oil will make changes in refinery output an important indicator over the longer term.
Final Thoughts
The signing of upgrade agreements by Cnergyico, Attock Refinery and National Refinery marks an important implementation stage for Pakistan’s brownfield refinery modernization policy.
The agreements place the three refineries within the framework established by the amended Pakistan Oil Refining Policy 2023, with ISGS serving as the implementation entity for the Petroleum Division.
The broader program is designed to modernize existing facilities, improve fuel quality, increase production of motor gasoline and diesel and reduce furnace oil output.
The government has previously estimated that the wider refinery modernization effort could unlock around $6 billion in investment.
The next stage will be just as important: turning signed agreements into financed, constructed and operational upgrade projects.
