Adil Khattak CEO, Attock Refinery Ltd
Quite a few so called specialists and analysts, ill-informed or misguided, present an overly skeptical assessment of Pakistan’s Brownfield Refining Policy, questioning its timing, economic viability, and approval process. While I have regard and respect for some whose opinion and analysis of issues is generally incisive and well-intentioned , I find some of the views on the recently approved Amended Brownfield Refining Policy quite disappointing.
Their understanding does not reflect the realities of Pakistan’s energy sector or the extensive technical and policy work that underpinned the initiative. The Brownfield Refining Policy was developed over more than six years through rigorous consultations, technical evaluations, and financial due diligence before its approval in August 2023, making it one of the most comprehensive reforms in Pakistan’s energy sector. The last three years delay in its implementation was caused initially by some lacunas and later due to exemption of petroleum products from Sales tax in Finance Act 2024 denying the refineries to adjust the sales tax paid at the input stage making the Upgradation projects unviable. The recent approval of the Amended Policy has resolved the sales tax issue as well as it provides some comfort to the investors about Policy consistency, which is need of the hour.
The suggestion that refinery modernization is no longer commercially viable is equally misplaced. Participating refineries have engaged internationally reputed technical and financial consultants to conduct detailed feasibility studies, confirming the commercial viability of their upgrade projects. Moreover, the policy includes a robust accountability framework under which incentives are collected and disbursed through a dedicated Escrow Account. Funds are released only upon the achievement of independently verified project milestones, ensuring transparency, accountability, and preventing misuse of incentives.
While global energy markets are evolving, Pakistan’s energy policies must be shaped by its own energy security, economic priorities, and industrial requirements rather than by global trends alone. Modernizing domestic refining capacity is a strategic necessity that will reduce dependence on imported fuels, improve fuel quality, attract investment, and strengthen national energy security.
The Brownfield Refining Policy is, therefore, a carefully conceived and thoroughly vetted initiative that deserves support rather than skepticism. Its successful implementation will modernize Pakistan’s refining industry, promote industrial growth, enhance energy security, and contribute to the country’s long-term economic development.
Hope such analysts have not been duped by detractors of the Refineries Upgradation Policy mostly led by the import mafia who would rather have the local refineries shut down.
The Amended Oil Refining Policy was finally approved on July 28, 2026 by the Cabinet Committee on Energy (CCOE) in it’s meeting chaired by the Prime Minister. The Policy originally notified on August 17, 2023 later amended in February, 2024 and again today after taking into consideration genuine concerns of the refineries on some of the issues which would have made the proposed upgradation projects unviable. The amendments were made after intense and prolonged consultation between the government, refineries, independent financial and legal advisory firms.
The Policy will enable the Oil Refineries to undertake major upgradation projects to not only comply with Euro – V specifications but also increase production of deficit products of petrol and diesel and also reduce production of furnace oil which because of drastically reduced demand in recent years often results in storage constraints forcing the refineries to reduce capacity utilisation.
The refineries upgradation will bring in investment of US $ 5 – 6 Billion and not only result in cleaner environment friendly fuels but also major savings of precious foreign exchange. The Refineries Upgradation Policy would surely be termed as the most important achievement of the government and it is hoped that it would be implemented in it’s true letter and spirit. The Policy, which took more than six years in the making mainly due to changes in the governments, bureaucracy and fiscal policies is now expected to finally take off, inshaAllah. Though the amended Policy unfairly penalises some of the refineries for the delay, it is still an occasion to celebrate in the larger interests of the country as every year of delay in upgradation of the local refineries was causing 1.5 to 2 billion dollars loss per annum to the country.
—The writer is also Chairperson, Energy Committee, Overseas Investors Chamber of Commerce and Industry (OICCI).
