Pakistan refineries stage massive earnings turnaround in FY26

September 16, 2026 (MLN): Pakistan's refinery sector swung to a combined net profit of Rs48.01bn in the fiscal year ended June 30, 2026, reversing a net loss of Rs10.58bn in the preceding year (FY25).

The refinery sector, for this review, comprises Attock Refinery Limited (PSX: ATRL), National Refinery Limited (PSX: NRL), and Pakistan Refinery Limited (PSX: PRL).

As per the statements of profit or loss compiled by Mettis Global for these three refinery companies, the sector's net sales/revenue rose 23.3% YoY to Rs1.13trn, up from Rs919.53bn in FY25.

The cost of sales grew at a comparatively slower pace of 14.4% YoY to Rs1.05tr, allowing the sector's gross profit to expand nearly 16x to Rs87.42bn, compared to just Rs5.55bn in the prior year.

On the expense side, administrative expenses rose 10.9% YoY to Rs4.86bn, distribution and selling costs increased 35.4% to Rs2.43bn, while other operating expenses/charges surged 54.1% to Rs6.14bn during the review period.

Other income, meanwhile, declined 28.3% YoY to Rs11.11bn from Rs15.51bn in FY25. Despite this, the sharp gross margin expansion propelled the sector's operating profit up 680.1% (nearly 7.8x) to Rs85.08bn, compared to Rs10.91bn in the preceding year.

Below the operating line, the sector's finance costs eased marginally by 3.7% YoY to Rs14.11bn, while levies rose 60.7% to Rs665.66m.

On the taxation front, the sector's tax expense increased 534.5% YoY to Rs26.84bn, compared to Rs4.23bn in FY25.

Supported by the massive gross margin recovery and a turnaround in non-refinery/associate income (led by ATRL's share of associate profit), the three refineries collectively closed FY26 with a combined net profit of Rs48.01bn, against a net loss of Rs10.58bn in the corresponding year.

Combined Statement of Profit or Loss for the year ended June 30, 2026 (Rs. '000)

 Excludes ATRL's post-tax associate/subsidiary contribution, shown separately below as ATRL discloses it after tax.

ATRL: Net profit surged 191.2% YoY to Rs26.06bn (FY25: Rs8.95bn), with EPS at Rs244.45 versus Rs83.93.

NRL: Swung to a net profit of Rs6.16bn from a loss of Rs14.87bn, with EPS at Rs77.09 versus a loss per share of Rs185.91.

PRL: Net profit rose to Rs15.78bn from a loss of Rs4.66bn, with EPS at Rs25.05 versus a loss per share of Rs7.40.

Outlook

PRL's near-term priorities center on advancing the Refinery Expansion and Upgrade Project (REUP) toward financial close and EPC execution, having already selected an EPCF contractor and issued a conditional Letter of Intent during FY26.

The company is targeting a doubling of crude processing capacity from 50,000 to 100,000 barrels per day, alongside a shift toward Euro V-compliant fuel production, while continuing to pursue prudent crude selection and working capital discipline.

NRL, meanwhile, flagged persistent structural headwinds including smuggled-product competition, thin product margins, rising utility costs, and freight/LC-related cost pressures as continuing to weigh on refinery profitability.

The company's forward plan centers on optimizing its crude mix toward lighter grades to lift high-speed diesel yields, expanding Premium Motor Gasoline and lube base oil output, and progressing feasibility studies for Euro-V motor spirit production, with configuration decisions expected once a third-party engineering study concludes in the third quarter of FY27.

On the policy front, the Economic Coordination Committee (ECC) approved the draft upgrade agreements under the Pakistan Oil Refining Policy for Upgradation of Existing/Brownfield Refineries, 2023, as amended in August 2026, setting a five-year implementation and monitoring framework for refinery upgrade incentives.

The agreements are expected to be signed by all refineries this month, subject to the prime minister's availability.

The ECC meeting, chaired by Finance Minister Muhammad Aurangzeb, also cleared the Prime Minister's Fuel Relief Scheme for lower-income transport users, to be rolled out through a digital Fuel Pass System.

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