Higher fuel prices: Refineries report Rs54.8bn profit in FY26

KARACHI: Pakistan’s listed refinery sector has posted a combined profit of Rs54. 8 billion in FY2025-26, compared with a loss of Rs10. 5 billion in the previous fiscal year, as wider petrol and diesel refining margins and higher sales volumes drove a sharp recovery in earnings. The sector’s revenue increased 27 percent year-on-year (YoY) to Rs1. 54 trillion from Rs1. 22 trillion in FY25, while gross profit surged to Rs107. 4 billion from Rs10. 4 billion. As a result, the sector’s gross profit margin improved to 7. 0 percent from 0. 9 percent, while the net profit margin stood at 3. 6 percent. The increase in revenue was supported by higher fuel prices, with ex-refinery prices of motor spirit (petrol) rising 17 percent YoY and high-speed diesel (HSD) prices increasing 19 percent. READ ALSO: Four oil refineries sign upgrade agreements Refinery activity also recovered during the year, with total petroleum product output rising 13. 4 percent to 11. 2 million tonnes, lifting overall capacity utilisation to 55 percent from 48 percent in FY25. Diesel production increased 17. 2 percent, while petrol output rose 12. 4 percent during the year. The production mix consequently shifted further towards diesel, which accounted for 50. 3 percent of total output compared with 48. 6 percent a year earlier. Meanwhile, furnace oil’s share of production declined to 21. 1 percent from 23. 1 percent, while jet fuel’s contribution increased to 4. 9 percent from 4. 4 percent. Total refinery sales rose 8. 6 percent to 10. 8 million tonnes. Diesel sales increased 13. 6 percent and petrol sales grew 11 percent, whereas furnace oil sales declined 7. 8 percent amid weaker demand from the power sector. According to Arif Habib Limited, the expansion in refining spreads was a key factor behind the sector’s earnings turnaround. The diesel margin against Arab Light crude increased to USD 29 per barrel from USD 9. 7 per barrel a year earlier, while the comparable petrol margin rose to USD 7. 4 per barrel from USD 2. 9. The report attributed part of the sharp increase in diesel margins to supply disruptions and procurement difficulties following the onset of the US-Iran conflict in March 2026. At the individual-company level, Attock Refinery Limited (ARL) reported a profit of Rs22. 1 billion, up 85 percent YoY, and declared a cash dividend of Rs17. 50 per share. Pakistan Refinery Limited (PRL) posted a profit of Rs15. 8 billion, compared with a loss of Rs4. 7 billion in FY25. The company’s earnings improved on the back of stronger refining margins despite a 1. 7 percent decline in sales volume. Cnergyico PK also returned to profitability, reporting a profit of Rs10. 8 billion against a loss of Rs2. 9 billion a year earlier. Its petroleum product sales increased 12. 3 percent during the year. National Refinery Limited (NRL) earned Rs6. 2 billion compared with a loss of Rs14. 9 billion in FY25. According to the report, NRL’s earnings were affected by approximately Rs13. 5 billion in policy and accounting charges. The sector’s earnings recovery was largely concentrated in the first three quarters, with profitability weakening sharply in the final quarter. Sector-wide gross profit fell to Rs8. 0 billion in 4QFY26 from Rs72. 2 billion in the preceding quarter. Despite the decline in quarterly gross profit, fourth-quarter sector revenue increased 27 percent to Rs530. 8 billion, according to the Arif Habib Limited report. Copyright Business Recorder, 2026

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