Refinery upgrade policy heads to cabinet

July 07, 2026 (MLN): Pakistan's long-awaited refinery upgrade policy has been submitted to the federal cabinet and is expected to receive approval shortly, paving the way for billions of rupees in refinery modernization investments and the production of Euro-V compliant fuels.

Petroleum Minister Ali Pervaiz Malik told the National Assembly Standing Committee on Petroleum on Tuesday that the policy had already been forwarded to the cabinet and the government planned to seek approval from the Economic Coordination Committee (ECC) on July 15.

He said implementation would begin immediately after the required approvals, enabling local refineries to upgrade their plants and produce cleaner Euro-V standard fuels.

 Pervaiz Malik said the government would not shift the financial burden of refinery inefficiencies onto consumers, adding that Prime Minister Shehbaz Sharif had decided against imposing any additional costs on petroleum users.

The minister said Pakistan was also moving toward gradual deregulation of the petroleum sector, allowing market-based pricing while maintaining oversight of the fuel supply chain.

He said authorities were working to digitalize the petroleum supply chain and were considering publishing daily Platts benchmark prices to improve transparency in the domestic fuel market.

On energy security,  Pervaiz Malik said the government was working on establishing strategic petroleum reserves, with two firms currently conducting feasibility studies.

He also announced that Pakistan would begin offshore oil and gas exploration later this year, marking the country's first offshore drilling campaign in nearly two decades.

Addressing concerns over circular debt, Malik said discussions with the International Monetary Fund (IMF) were ongoing and expressed confidence that the energy sector's circular debt would not increase during the current fiscal year.

Separately, members of the parliamentary committee raised concerns over delays in utilizing Corporate Social Responsibility (CSR) funds in Sindh and Balochistan, while seeking details regarding the use of such funds in Khyber Pakhtunkhwa.

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