Pakistan Refinery Limited reports a turnaround from a Rs4.7 billion loss, while geopolitical uncertainty, crude supply diversification and financing constraints shape its future expansion plans.
Pakistan Refinery Limited (PRL) reported its highest-ever annual profit after tax of Rs15.8 billion for FY26, reversing a loss of Rs4.7 billion in the previous financial year, as improved global refining margins supported earnings.
During an analyst briefing, PRL management said the refinery processed 1.72 million tonnes of crude oil in FY26. High-speed diesel (HSD) production reached a record 800,800 tonnes, while motor spirit (MS) output stood at 309,400 tonnes.
HSD accounted for approximately 48% of total production, followed by furnace oil at 26% and MS at 18%. However, furnace oil remains a major challenge because of limited domestic demand. PRL produced 433,000 tonnes during FY26, with 386,800 tonnes exported.
Management emphasised that higher revenue or crude throughput does not automatically translate into stronger profitability, as earnings depend on product mix and refining margins. Processing heavier crude can increase furnace oil yields under the refinery’s existing hydro-skimming configuration.
Geopolitical tensions and disruptions to shipping through the Strait of Hormuz pushed up crude and petroleum product prices during the second half of FY26. Higher freight and insurance costs added Rs700 million to PRL’s expenses.
The refinery is also diversifying crude supplies. ADNOC accounted for 68% of crude intake in FY26, while Aramco contributed 20% and Nigerian Bonny Light 10%. In the first quarter of FY27, ADNOC represented around 90% of the crude mix, alongside 11–12% local crude, according to management.
PRL plans to pursue alternative crude grades, including Libyan and Nigerian supplies, where economically viable.
Refinery upgrade awaits financial close
PRL has completed front-end engineering design (FEED), received engineering, procurement and construction (EPC) bids, and issued a conditional Letter of Intent to its selected contractor.
However, financial close remains pending amid geopolitical uncertainty and limited appetite among international lenders for fossil-fuel projects. The company is appointing financial advisers to arrange foreign-currency financing, local funding and equity, with a rights issue among the possible options.
Management also clarified that the 27.5% incentive cap under the revised Brownfield Refining Policy applies to the EPC contract value, excluding financing and owner-related costs.