Pakistan’s Refinery Sector Takes a Hit as Diesel Demand Weakens

Pakistan’s overall refinery upliftment declined 7 percent year-on-year in May 2026 as weaker demand for high-speed diesel (HSD) and furnace oil (FO) offset growth in motor spirit (MS), according to data compiled by Arif Habib Limited and OCAC.

Total refinery upliftment fell to 927,000 tons in May 2026 from 997,000 tons in the same month last year. The decline was primarily driven by lower offtake of HSD and furnace oil, which continue to face demand pressures from changing consumption patterns and market conditions.

HSD uplift dropped 19.1 percent year-on-year to 409,000 tons from 505,000 tons a year earlier. Analysts attributed the decline to reduced purchases by oil marketing companies and a possible resurgence in cross-border smuggling as higher domestic diesel prices widened the price gap with neighboring markets.

Furnace oil uplift also remained under pressure, falling 4.2 percent year-on-year to 220,000 tons. However, furnace oil demand has shown signs of recovery in recent months as limited RLNG availability and higher refinery production have encouraged its use in power generation and industrial operations.

In contrast, motor spirit, commonly known as petrol, remained relatively resilient. MS uplift increased 4.3 percent year-on-year to 247,000 tons, reflecting steady transportation demand despite broader economic challenges.

Among individual refiners, Attock Refinery Limited recorded a 7 percent increase in total upliftment to 112,000 tons, while National Refinery Limited reported a 5.6 percent decline to 135,000 tons. Pakistan Refinery Limited posted a modest 3.4 percent increase, whereas PARCO, the country’s largest refinery, saw total upliftment decline 12.7 percent year-on-year to 384,000 tons.

The latest figures come as Pakistan’s petroleum sector continues to navigate changing fuel consumption trends. Petrol demand has remained comparatively stable, while diesel consumption has faced pressure from slower economic activity, efficiency gains, and concerns over smuggling. At the same time, furnace oil has staged a partial comeback after years of declining demand due to the power sector’s growing reliance on RLNG and renewable energy sources.

During the first 11 months of FY2025-26, total refinery upliftment reached 9.97 million tons, broadly in line with the 9.92 million tons recorded in the corresponding period last year, indicating that overall fuel demand has remained relatively stable despite monthly fluctuations.