National Refinery Limited (NRL) expects the government’s long-delayed refinery policy to be finalized soon, with most outstanding issues already resolved, Chief Executive Officer Asad Hasan said.
Speaking at the Pakistan Investor Connect Conference hosted by Topline Securities, Hasan said the company is preparing a major brownfield refinery upgrade that could cost between $400 million and $1.2 billion, depending on the final configuration approved under the new policy.
The project is expected to take five to six years to complete after the policy is notified. NRL has appointed UK-based engineering firm Wood to conduct the feasibility study, which will determine the scope of the modernization plan.
The upgrade will enable the refinery to produce Euro-V compliant fuels, significantly reduce furnace oil output and improve the production of higher-value petroleum products in line with changing domestic demand.
Management said up to 27.5 percent of the investment could be financed through OGRA’s escrow mechanism, with the remaining funding sourced through internal cash flows and borrowings.
NRL has already improved its product mix in recent years. High-Speed Diesel production is expected to increase to around 900,000 tonnes in FY26 from 635,000 tonnes in FY22, while Motor Spirit (petrol) production has nearly doubled to approximately 300,000 tonnes. Lubricant Base Oil output, however, is projected to decline to about 125,000 tonnes.
The company said its operating cost remains relatively high at $8-9 per barrel because it is Pakistan’s only refinery producing lubricant base oil alongside refined fuels.
Management also noted that diesel smuggling had reduced refinery sales in recent years, but the recent decline in smuggling has allowed the refinery to sell its entire diesel production over the past several days.
NRL said the Iran-US conflict temporarily pushed crude oil prices and freight costs sharply higher, increasing its working capital requirements and raising bank borrowing. However, the subsequent decline in oil prices is expected to result in inventory losses during the fourth quarter of FY26.
The refinery currently operates at 85-90 percent of its installed capacity while processing a crude mix of roughly 70 percent light crude and 30 percent heavy crude, with heavier grades remaining essential for lubricant base oil production.
