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ISLAMABAD: At last, the government has notified the 42-page Brownfield Refinery Policy 2023, incorporating amendments made in February 2024 and August 2026, paving the way for around $5 billion in refinery upgrade projects aimed at producing environment-friendly Euro-V specification petrol and diesel in the country.
The long-awaited notification was issued on September 10, 2026, formally bringing the amended policy into effect. Under the policy, local refineries are required to establish Refinery Upgradation Accounts within 45 days of notification. Separately, senior government officials said the country’s five refineries are expected to sign their Upgrade Agreements (UAs) by October 1, 2026, at a high-level signing ceremony expected to be attended by Prime Minister Shehbaz Sharif.
Refineries that missed the October 22, 2024 deadline are already facing a cut in HSD deemed duty from 7.5% to 5%, with ARL and NRL incurring daily financial impacts of around Rs7.5 million and Rs10 million, respectively, according to officials. The deemed duty will fall further to 2.5% for refineries that fail to sign Upgrade Agreements by October 1, 2026 and will be withdrawn entirely on November 15, 2026, creating progressively greater financial pressure to undertake the upgrades.
Meanwhile, the Petroleum Division has sent a summary to the Economic Coordination Committee (ECC) seeking approval of the draft Upgrade Agreement, the contractual instrument through which the refinery upgradation programme will be implemented. M/s Inter State Gas Systems (ISGS) has been designated as the policy implementation entity on behalf of the Petroleum Division and will execute Upgrade Agreements, operate Refinery Upgradation Accounts, monitor projects, engage technical consultants and auditors, and administer incentive payments. The agreement will provide a uniform framework for implementing projects, administering the accounts, verifying milestones and disbursing incentives.
