The Economic Coordination Committee (ECC) of the federal cabinet on Monday approved the Draft Upgrade Agreement under the Pakistan Oil Refining Policy 2023, as amended in August 2026, for major investments in the country’s existing and brownfield oil refineries.
The agreement will provide the framework for implementing and monitoring refinery upgrade projects and related incentives, with the projects to be completed within five years.
Pakistan is seeking around $6 billion in investment to modernize its ageing refining infrastructure and increase domestic production of cleaner fuels.
The planned upgrades could increase petrol production by up to 72 percent and high-speed diesel output by around 39 percent, according to sources. The investment is also expected to support local production of Euro-V standard petroleum products.
The framework includes investment protection measures such as stability clauses and tax incentives. It also allows foreign currency accounts for importing machinery and equipment needed for refinery modernization.
The policy further proposes measures to expand onshore and offshore petroleum storage capacity, which could strengthen the country’s energy security.
Pakistan’s existing refineries are largely ageing. The proposed upgrades aim to improve efficiency, meet environmental standards, and increase the production of higher-quality fuels locally.
Higher domestic refining capacity could reduce Pakistan’s dependence on imported petrol and diesel and help ease pressure on fuel prices over the longer term.
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