Cabinet Approves Refining Policy Amendments to Unlock $5bn Investment, Boost Fuel Exports

ISLAMABAD: The Cabinet Committee on Energy (CCoE), chaired by Prime Minister Shehbaz Sharif, on Tuesday approved amendments to the Pakistan Oil Refining Policy 2023, paving the way for an estimated $5 billion investment in the country’s oil refining sector and enabling local refineries to produce cleaner fuels meeting international standards.

Officials told the meeting that the revised policy would allow existing brownfield refineries to upgrade their facilities, enabling them to convert furnace oil into higher-value petroleum products such as petrol and diesel. The government expects the modernisation drive to reduce the production of low-value furnace oil, increase the output of Euro-V compliant fuels and potentially generate annual export earnings of around $2bn through surplus petroleum products.

Chairing the meeting at the Prime Minister’s Office, Prime Minister Shehbaz Sharif described refinery upgradation as a critical national priority and a key component of Pakistan’s energy security strategy.

“Modern refineries will not only meet the country’s growing energy requirements more efficiently but will also reduce dependence on imported fuels and ensure the supply of environmentally friendly petroleum products,” the prime minister said.

A briefing to the committee highlighted that upgrading existing refineries was essential to expand production capacity and enable the manufacture of Euro-IV and Euro-V standard fuels, helping Pakistan fulfil its international environmental commitments while reducing air pollution and improving fuel quality.

The committee approved the proposed amendments to the Pakistan Oil Refining Policy 2023 relating to brownfield refinery projects. According to officials, the revised framework is designed to encourage investment in refinery modernisation, facilitate the production of cleaner petrol and diesel, and significantly reduce the output of furnace oil and other low-grade petroleum products.

The prime minister also directed authorities to introduce reforms in the Oil and Gas Regulatory Authority (Ogra) to improve its efficiency and responsiveness to market needs, with the objective of promoting competition, transparency and investment in the energy sector.

He stressed that the revised policy must be implemented without delay, warning that negligence or slow execution would not be tolerated. Relevant ministries and institutions were instructed to maintain close coordination with stakeholders to expedite the reform process.

To attract foreign investment, Mr Sharif directed the petroleum ministry to organise roadshows in Qatar, Saudi Arabia and other Gulf countries to promote the amended refining policy and investment opportunities in Pakistan’s brownfield refinery projects.

The prime minister also appreciated the petroleum minister and his team for preparing the policy amendments and directed authorities to enhance Pakistan’s strategic petroleum reserves to strengthen long-term energy security.

The meeting was attended by Federal Ministers Ahad Khan Cheema, Muhammad Aurangzeb, Ali Pervaiz Malik and Ahsan Iqbal, along with senior government officials and federal secretaries.