Attock Refinery prepares for major upgrade to improve fuel quality in Pakistan

ISLAMABAD: Attock Refinery Limited (ARL) has reaffirmed plans to move forward with its long-awaited refinery upgradation project worth $500 million, once pending fiscal and regulatory issues are cleared.

During an analyst briefing following its FY25 financial results, the company said the project would take around four to five years to complete after final approvals. The plan includes setting up a Continuous Catalyst Regeneration (CCR) unit and revamping the Diesel Hydro Desulphurization (DHDS) unit.

These improvements are expected to raise motor spirit output by about 25 percent and bring fuel quality up to Euro-V standards in Pakistan.

Project to boost efficiency and savings

Once operational, the modernisation is projected to save the company around Rs15–17 billion annually. Management said ARL, known as one of the country’s most efficient refineries, continues to face challenges due to lower crude supplies from northern oil fields and weak demand for furnace oil.

Recent government levies, including the Petroleum Development Levy and Carbon Surcharge Levy, have increased local furnace oil prices by nearly 80 percent, forcing the company to divert exports despite higher transport costs to Karachi.

ARL operated at an average 69 percent utilisation in FY25, dipping further to 65 percent in the first quarter of FY26. The company has urged the government to allocate 5,000 barrels per day of crude from southern fields to maintain steady operations, while discussions are under way with Qatar to improve gas availability in the north.

Despite these setbacks, ARL reported a profit after tax of Rs12 billion in FY25, supported by a strong cash position of Rs86 billion. The management said it remains fully committed to upgrading its refinery as soon as the government resolves taxation and policy delays affecting the sector.

It is worth noting that fuel quality has long been a concern in Pakistan. Motorists across the country, whether driving new vehicles or older models, have frequently complained about poor fuel standards affecting engine performance.

Social media has often featured reports from users claiming that substandard fuel damaged their vehicles’ engines or reduced efficiency. However, this situation is now expected to improve with upcoming refinery upgrades and quality standards.