Attock Refinery Upgrade to Boost Fuel Quality in Pakistan
Attock Refinery Limited (ARL) has confirmed plans to move ahead with its long awaited $500 million upgrade project. The decision comes as the company awaits clearance of fiscal and regulatory issues from the government.
During an analyst briefing after its FY25 results, ARL announced that the upgrade will take about four to five years to complete once approvals are granted. The project includes installing a Continuous Catalyst Regeneration (CCR) unit and revamping the Diesel Hydro Desulphurization (DHDS) unit.
These improvements aim to raise motor spirit output by around 25% and bring fuel quality in line with Euro-V standards in Pakistan. As a result, the refinery’s operations will become cleaner and more efficient.
Efficiency and Economic Gains
Once operational, the modernization is expected to save Rs15–17 billion annually. Management stated that ARL remains one of the most efficient refineries in Pakistan. However, it continues to face challenges from declining crude supplies in northern oil fields and weak furnace oil demand.
Recently, higher government levies, including the Petroleum Development Levy and Carbon Surcharge Levy, have pushed local furnace oil prices up nearly 80%. Therefore, the company has been forced to export furnace oil despite higher transportation costs to Karachi.
In FY25, ARL operated at an average 69% capacity, which slipped to 65% in the first quarter of FY26. To stabilize operations, the company urged the government to allocate 5,000 barrels per day of crude from southern fields. Additionally, talks with Qatar are underway to enhance gas availability in the northern region.
Despite these hurdles, ARL posted a profit after tax of Rs12 billion in FY25, supported by a strong cash position of Rs86 billion. The management reaffirmed its commitment to proceed with the refinery upgrade once taxation and policy issues are resolved.
Fuel quality has long been a concern in Pakistan. Many motorists have complained about poor fuel standards affecting engine performance. Reports on social media often highlight how low grade fuel damages vehicles and reduces efficiency. However, the upcoming Attock Refinery Upgrade promises a cleaner, higher quality fuel future for all drivers in Pakistan.
