Oil Crisis Forces Pakistan to Bring $6 Billion Refinery Project Back from the Dead

Pakistan is speeding up the long-delayed $6 billion refinery upgrade plan after the Gulf War exposed the country’s heavy dependence on imported fuel.

The crisis has already pushed international oil prices higher and forced Pakistan to repeatedly drop petrol bombs on citizens.

The project aims to upgrade Pak-Arab Refinery Limited (PARCO), Attock Refinery Limited (ARL), National Refinery Limited (NRL), Cnergyico Pakistan Limited, and Pakistan Refinery Limited (PRL).

The upgrades will enable production of cleaner Euro-V standard fuels, including petrol, diesel, furnace oil, and other refined petroleum products and also protect the environment.

The project could attract at least $6 billion in investment once outstanding policy and taxation issues are resolved.

Pakistan currently operates refining capacity of roughly 450,000–500,000 barrels per day, equivalent to about 21–23 million tons annually. After the upgrade, output could increase to nearly 33 million tons per year by 2035.

Finance Minister Muhammad Aurangzeb is scheduled to chair a high-level meeting with regulators, tax authorities, and refinery executives to address financial and regulatory hurdles tied to the refinery upgrade plan.

Pakistan’s annual fuel import bill reached about $16 billion last year, making the economy more vulnerable to external shocks, particularly during geopolitical crises affecting oil-producing regions.

Industry representatives have urged the government to restore tax incentives, including relief on imported equipment.