Islamabad: The Economic Coordination Committee (ECC) has approved the upgrade agreement for the modernisation of the country’s existing and brownfield oil refineries, paving the way for practical progress on long-pending refinery projects.
The decision was taken in the ECC meeting chaired by Finance Minister Muhammad Aurangzeb on September 14. The agreement has been prepared under the 2023 Policy on Upgradation of Existing and Brownfield Refineries and the amendments made in August 2026.
The approved agreement will provide a basic framework for the implementation and monitoring of refinery upgrade projects. Under it, the incentives given by the government and the progress of the projects will also be organised under a regular mechanism.
The government has set a period of five years for the completion of refinery upgrade projects. During this period, refineries will have to improve their production capacity and technology, as well as improve the quality of petroleum products.
The main objective of the government’s new policy is to modernise local refineries and increase the production of better quality petrol and diesel in the country. The policy will focus on increasing the production of Euro-5 standard products and reducing the production of furnace oil.
According to the Petroleum Division, five major refineries in the country are part of this programme. These include Pakistan Arab Refinery Limited (PARCO), Pakistan Refinery Limited, National Refinery Limited, Attock Refinery Limited and Signer Geco Pakistan.
The government expects an investment of about 6 billion dollars from the refinery upgrade programme. This investment can improve the efficiency of refineries and increase the production of quality fuel at the local level.
According to officials, one of the main objectives of these projects is to reduce Pakistan’s dependence on imported fuel. Improving the production capacity and quality of domestic refineries can help reduce pressure on the import of petroleum products.
The government has also entrusted the Interstate Gas Systems (ISGS) with key responsibilities for implementing agreements and monitoring projects. In addition to monitoring the upgrade projects, the agency will also play a role in managing related accounts and incentives.
The refinery upgrade programme has been a part of discussions between the government and refinery owners for several years. The main issue was how to incentivise refineries to invest in modernisation and ensure the desired results.
After the ECC approval, the focus will now be on signing agreements, practical commencement of investments and completion of projects within the stipulated time frame.
Successful upgrading of refineries could prove to be crucial for Pakistan’s energy sector. However, its impact will not be limited to investment alone. Timely completion of projects, improvement in fuel quality and reduction in furnace oil production will be the real measure of the success of this policy.
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