Pakistan’s oil refining industry crossed the $1 billion export threshold for the first time during FY26, with the country’s five major refineries collectively generating an estimated $1.046 billion in export proceeds. The milestone makes the refining industry an important source of foreign exchange at a time when Pakistan’s overall merchandise trade position has come under pressure. The sector’s export earnings accounted for nearly 3.5% of the country’s total merchandise exports of $30.139 billion during FY26, highlighting the growing contribution of petroleum products to export receipts despite the industry traditionally being associated with the country’s fuel import requirements.
Pakistan Refinery Company Limited (Parco) recorded the highest export proceeds among the five major refiners, generating approximately $277 million during FY26. Cnergyico PK Limited followed with around $258 million in exports, bringing the combined export earnings of the two companies to approximately $535 million. Their combined contribution represented more than half of the refining sector’s total export proceeds during the year. National Refinery Limited generated around $238 million, while Pakistan Refinery Limited contributed approximately $200 million. Attock Refinery Limited recorded export proceeds of close to $73 million, completing the estimated $1.046 billion generated collectively by the five major refiners.
The performance comes against a challenging backdrop for Pakistan’s merchandise trade. Total merchandise exports declined by approximately 5.9% year-on-year during FY26, falling from $32.04 billion in FY25 to $30.139 billion. At the same time, merchandise imports increased to approximately $69.76 billion, resulting in a merchandise trade deficit of around $39.62 billion. With overall exports declining while imports continued to rise, the refining sector’s billion-dollar export contribution provided an additional source of foreign exchange during a period in which Pakistan faced a substantial external trade gap.
The increase in refinery exports has been closely linked to changing patterns of domestic petroleum consumption, particularly the sharp decline in furnace oil demand. The power sector has significantly reduced its reliance on furnace oil, weakening domestic demand for a product that continues to be generated as part of the refining process. Refineries process crude oil into multiple petroleum products at the same time, meaning they cannot simply stop producing furnace oil while continuing to manufacture petrol, high-speed diesel, jet fuel and other products required by the domestic market. As a result, weaker local demand for furnace oil has created a challenge for refiners by leaving them with surplus inventories.
The accumulation of surplus furnace oil has at times affected refinery operations, with refiners facing pressure to reduce crude-processing rates or temporarily shut down units when storage capacity becomes constrained. Exporting the excess production has provided a way for refineries to manage these inventories while maintaining their overall operations. By sending surplus furnace oil to international markets, refiners have been able to clear accumulated stocks, sustain crude-processing activity and continue producing essential petroleum products for domestic consumers. This has also allowed the industry to generate foreign exchange from products that have faced weaker demand within Pakistan.
The Oil and Gas Regulatory Authority (OGRA) has played a role in facilitating this process by allowing refineries to export surplus furnace oil, subject to the condition that sufficient stocks are maintained for domestic consumption. The regulatory arrangement enables refiners to dispose of excess production in overseas markets without compromising the availability of petroleum products required within the country. The ability to export surplus furnace oil has therefore become an important mechanism for managing the mismatch between refinery production and changing domestic demand.
The record export performance represents a notable shift in the role of Pakistan’s refining sector within the country’s external trade position. While petroleum products have historically contributed significantly to Pakistan’s import bill, the latest figures show that domestic refiners can also provide a sizeable stream of foreign exchange through exports when market conditions and regulatory arrangements allow surplus production to be sold internationally. The $1.046 billion export figure for FY26 therefore marks a significant milestone for the industry and provides an additional source of export earnings at a time when Pakistan’s overall merchandise exports declined during the year.
With Parco and Cnergyico accounting for more than half of the sector’s export proceeds and the remaining three major refiners also recording substantial export earnings, the performance was broad-based across the industry. The results underline how changes in domestic fuel consumption, particularly reduced furnace-oil demand from the power sector, can influence refinery operations and create opportunities for exports. For FY26, the refining industry’s first-ever crossing of the $1 billion export mark has emerged as a significant contribution to Pakistan’s foreign exchange earnings amid a merchandise trade deficit of nearly $40 billion.
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