Pakistan Approves New Oil Refining Policy: Attock, National and PRL in Focus

What the New Oil Refining Policy Changed

Pakistan's government approved amendments to the Oil Refining Policy 2023, aimed at cutting the country's reliance on imported fuel and lifting local production of petrol and high-speed diesel. The framework is designed to draw around $6 billion of investment into the refining sector, modernise ageing plants, raise output of transport fuels, sharply reduce furnace oil production and improve fuel quality to Euro 5 standards. It was developed with input from the Special Investment Facilitation Council.

To support the shift, refineries are being offered a seven-year incentive package, and operators must sign implementation agreements with the Oil and Gas Regulatory Authority within 90 days of approval.

Why Refinery Stocks Like Attock and National Are in Focus

Refiners earn on the refining margin, the gap between the cost of the crude they buy and the value of the fuels they sell, along with policy support such as deemed duty. Upgrading a refinery to make cleaner, higher-value fuel is expensive, so the economics only work if the returns are protected for long enough to pay back the spend. A seven-year incentive package is aimed squarely at that problem, giving refiners a clearer basis to commit to modernisation.

Which Stocks, and Why

Attock Refinery and National Refinery are established refiners whose earnings track refining margins and the terms of the policy that governs upgrades. Pakistan Refinery is in the middle of its own upgrade programme, so a stable, incentive-backed framework is directly relevant to how it funds and completes that work. For all three, the shift away from low-value furnace oil toward petrol and diesel is the kind of change the policy is trying to encourage.

The benefit is not automatic. It depends on each refiner signing the OGRA agreement, committing the capital and executing the upgrades, which is why this is a supportive backdrop that plays out over years rather than an immediate jump in profit.

What to Watch

The first checkpoint is the 90-day window for refiners to sign implementation agreements with OGRA, which will show who is actually committing to the policy. After that, watch each company's capital spending plans and the size of the upgrade projects it announces. The search for Gulf funding is the other thread, since foreign investment would speed up the modernisation the policy is built around. Crude prices and product demand still set the underlying margins that determine whether the upgraded output pays off.