Pakistan’s listed refineries posted a combined net profit of Rs. 54.8 billion in fiscal 2026, reversing a Rs. 10.5 billion loss a year earlier, as stronger petrol and diesel refining margins and higher production volumes supported a sharp recovery in earnings, according to an Arif Habib Ltd. report.
The report said sector revenue rose 27% to Rs. 1.54 trillion in FY26 from Rs. 1.22 trillion in FY25, while gross profit surged to Rs. 107.4 billion from Rs. 10.4 billion. The gross profit margin increased to 7% from 0.9%, while the net profit margin reached 3.6%.
Higher petroleum prices also contributed to the increase in revenue. Ex-refinery prices of motor spirit, or petrol, rose 17% year on year, while high-speed diesel prices increased 19%, according to the report.
Refinery output, sales increase
Refinery activity recovered during the year, with combined petroleum product production increasing 13.4% to 11.2 million tons from 9.9 million tons, lifting capacity utilization to 55% from 48%.
Diesel production rose 17.2%, while petrol output increased 12.4%.
The production mix shifted toward diesel, which accounted for 50.3% of total output compared with 48.6% in FY25. Furnace oil’s share declined to 21.1% from 23.1%, while jet fuel increased to 4.9% from 4.4%. Total refinery sales increased 8.6% to 10.8 million tons. Diesel sales rose 13.6% and petrol sales increased 11%, while furnace oil sales declined 7.8% amid weaker demand from the power sector.
Arif Habib Ltd. said wider refining spreads were a key driver of the sector’s turnaround. The diesel refining margin against Arab Light crude increased to $29 per barrel in FY26 from $9.7 per barrel a year earlier. The comparable petrol margin rose to $7.4 per barrel from $2.9.
The brokerage attributed part of the sharp increase in diesel margins to supply disruptions and procurement difficulties following the onset of the U.S.-Iran conflict in March 2026.
Individual refinery performance
Attock Refinery Ltd. reported a profit of Rs. 22.1 billion, an 85% year-on-year increase, and declared a dividend of Rs. 17.50 per share, according to the report. Pakistan Refinery Ltd. posted a Rs. 15.8 billion profit compared with a Rs. 4.7 billion loss in FY25. The improvement came despite a 1.7% decline in sales volumes, supported by stronger refining margins.
Cnergyico PK returned to profitability with earnings of Rs. 10.8 billion, compared with a Rs. 2.9 billion loss a year earlier. Its petroleum product sales increased 12.3%.
National Refinery Ltd. earned Rs. 6.2 billion compared with a Rs. 14.9 billion loss in FY25. Its earnings were affected by about Rs. 13.5 billion in policy and accounting charges, according to Arif Habib Ltd.
Fourth-quarter earnings weaken
The report said the sector’s earnings recovery was concentrated in the first three quarters of FY26.
Combined gross profit fell sharply to Rs. 8 billion in the fourth quarter from Rs. 72.2 billion in the preceding quarter, even as quarterly revenue increased 27% to Rs. 530.8 billion. The figures highlight the sensitivity of refinery earnings to changes in international refining margins, crude procurement conditions, domestic fuel demand and petroleum pricing.