Pakistan Refinery Limited reports record FY26 profit of Rs15.8 billion as it diversifies crude procurement and reassesses its Rs-based refinery expansion strategy amid geopolitical and financing challenges.

KARACHI: Pakistan Refinery Limited (PRL) continues to receive crude oil through Fujairah and Saudi Arabia’s Yanbu route despite disruptions around the Strait of Hormuz, while exploring alternative suppliers, including Africa, to diversify procurement.

At its annual general meeting, PRL management said Abu Dhabi National Oil Company (ADNOC) accounts for approximately 60% of crude procurement, while Saudi Aramco contributes around 30%. About 90% of purchases are secured through term contracts, providing greater supply certainty.

PRL reported its highest-ever profit after tax of Rs15.8 billion in FY26, processing approximately 1.72 million tonnes of crude at more than 80% capacity utilisation. High-speed diesel production exceeded 800,000 tonnes, marking a record.

Management said customs duty remained recoverable under the refinery policy and expressed expectations of recovery in line with applicable provisions. The company is also examining Oman as an alternative transit and shipping route, although it has not signed a crude supply contract with the country.

PRL’s upgrade project aims to double refining capacity from 50,000 to 100,000 barrels per day, achieve Euro-V fuel standards and reduce furnace oil production through deep-conversion technology.

Following completion of the feasibility study in December 2024 and receipt of two engineering, procurement and construction bids, geopolitical uncertainty and financing constraints prompted a reassessment of the project strategy. PRL is reviewing implementation options and plans to appoint a financial adviser.

Management expects incentives equivalent to around 27.5% of engineering, procurement and construction costs under the revised refinery policy. Dividend payouts remain limited as the company prioritises cash preservation for the upgrade.