KARACHI: Pakistan’s refinery sector is set to benefit from elevated gross refining margins (GRMs) as the spread between crude oil and refined petroleum products widens.
Rising geopolitical tensions in the Middle East have pushed up international prices of crude oil as well as high-speed diesel (HSD) and motor spirit (MS), expanding refining spreads.
The spread between crude oil and HSD has climbed to around $55 per barrel, while the gap between crude and MS stands at about $10 per barrel. Historically, the average spread between crude and petroleum products ranges between $25 and $30 per barrel, according to industry data.
Refinery throughput and product uplift posted a strong recovery in February 2026, with total volumes rising 29 per cent year-on-year (YoY), driven by higher demand for MS, HSD and furnace oil (FO), according to a report by Arif Habib Limited.
HSD uplift surged 43.7 per cent YoY to 458,000 tonnes during the month, reflecting stronger domestic consumption, reduced inflows from Iran and improved refinery utilisation. MS volumes rose 16.9 per cent to 223,000 tonnes on the back of firm demand and higher output.
FO uplift increased 14.3 per cent to 162,000 tonnes. However, analysts noted that a significant portion of FO output was likely exported at a loss due to weak domestic demand. Data from oil marketing companies showed FO sales falling 16.4 per cent YoY to 44,000 tonnes, largely due to lower FO-based power generation amid reduced hydel availability.
During the first eight months of FY26, total refinery uplift reached 7.1 million tonnes, up 12.5 per cent YoY, supported by MS and HSD offtake, which rose 11.8 per cent and 22.7 per cent, respectively.
Company-wise data showed a mixed trend in February.
Sales at Attock Refinery Limited fell 5.5 per cent YoY to 98,000 tonnes. While HSD sales increased 14.3 per cent, MS and FO volumes declined by 0.5 per cent and 76.7 per cent, respectively. The company continued to face crude supply constraints from northern fields, weighing on MS offtake. Its market share slipped to 11.1 per cent, below its historical average of 13.7 per cent.
In contrast, Pakistan Refinery Limited posted a 55.4 per cent YoY increase in sales to 147,000 tonnes, driven by growth across all major products. MS, HSD and FO volumes rose 61.1 per cent, 46.9 per cent and 67.6 per cent, respectively.
Similarly, National Refinery Limited reported a 51.7 per cent jump in sales to 113,000 tonnes, supported by sharp increases in MS (up 63.6 per cent) and HSD (up 77.8 per cent) following a planned turnaround in the same period last year.
Cnergyico PK Limited also recorded strong growth, with sales rising 81.8 per cent YoY to 135,000 tonnes, led by MS, HSD and FO volumes, which increased 79.2 per cent, 96.1 per cent and 62.6 per cent, respectively.
