The government has taken a major step toward increasing local fuel production, a move that could help reduce reliance on imported petrol and diesel and potentially bring down fuel prices in the future.
The planned upgrades of the country’s oil refineries are expected to increase domestic production of petrol and diesel while improving the production of Euro-5 standard fuels. The development could have a positive impact on fuel prices over the longer term.
Federal Petroleum Minister Ali Pervaiz Malik held meetings in Karachi with the management of all five oil refineries to discuss refinery modernisation, financial and operational performance, and Pakistan’s energy security.
Implementation of the Brownfield Refinery Upgrade Policy was also discussed during the meetings. According to the petroleum minister, all five refineries are ready to sign agreements under the policy, with the agreements expected to be signed at the beginning of next month.
Over $6 billion investment expected in refinery upgrades
According to the federal minister, the refinery modernisation projects are expected to attract more than $6 billion in investment in Pakistan.
He said upgrading the country’s refineries is essential for the long-term sustainability of Pakistan’s refining sector. The modernisation projects are also expected to improve the country’s capacity to produce Euro-5 standard petrol and other fuels locally.
Higher local production could reduce fuel imports
Ali Pervaiz Malik said improvements in refinery capacity and technology would increase domestic production of petrol and diesel.
Higher local production could reduce Pakistan’s dependence on imported fuel and help save valuable foreign exchange, he added.
The minister further said that increased domestic fuel production could help create room for lower petrol and diesel prices in the future.
However, the refinery upgrades are a long-term measure, meaning they are not expected to immediately reduce petrol prices at fuel stations.
Government to facilitate refinery upgrades
The petroleum minister assured refineries that the government would provide all possible support to resolve issues arising during the implementation of the refinery upgrade policy.
He described refinery modernisation as an important step toward meeting Pakistan’s energy requirements, increasing domestic fuel production and strengthening the country’s energy sector.
All five refineries ready to sign agreements
PARCO, Pakistan Refinery Limited, Attock Refinery, National Refinery and Cnergyico have completed the necessary preparations to implement the refinery upgrade policy.
Officials said signing the upgrade agreements would mark a major step toward putting the policy into practical action.
Oil City project in Hub also discussed
During the meetings, PARCO also briefed the petroleum minister on progress regarding the proposed Oil City project in Hub.
Officials said the project aims to strengthen Pakistan’s energy security, improve trade connectivity, ensure reliable fuel supplies and promote economic activity.
The government expects refinery modernisation to stabilise domestic fuel supplies, reduce dependence on imported petrol and diesel, strengthen energy security and provide long-term benefits to the national economy.
Will petrol prices actually fall?
The refinery upgrades could help lower Pakistan’s dependence on imported fuel and increase domestic production, potentially putting downward pressure on petrol and diesel prices in the future.
However, the extent and timing of any petrol price reduction remain uncertain and will depend on factors including international oil prices, exchange rates, taxes, petroleum levies and the cost of producing and supplying fuel locally.
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