Fuel demand lifts September refinery output

ISLAMABAD: The refining sector recorded a notable recovery in September 2025, led by Pakistan-Arab Refinery Company (Parco), which achieved a 98 percent capacity utilisation rate, the highest among local refineries, according to the latest industry data.

Industry throughput, excluding furnace oil, rose 21.6 percent year-on-year (YoY), indicating a rebound in fuel consumption and overall economic activity. The increase was driven mainly by high-speed diesel (HSD), whose offtake climbed 32.1 per cent YoY due to strong agricultural demand, higher transport activity and reduced inflows of Iranian diesel. Refineries across the country raised throughput to meet domestic needs.

Throughout 2025, Parco maintained strong operational performance, with utilisation rates of 93 percent in April; 103 per cent in June; 81 percent in July; and 84 percent in August, before reaching near-peak levels in September. The company accounted for around 55 per cent of the industry’s total output. Diesel and motor spirit (MS) sales rose 38.7 per cent and 19.4 per cent YoY, respectively, supported by higher demand and efficient operations.

Furnace oil (FO) demand, however, continued to decline amid the ongoing shift away from oil-based power generation. FO sales fell 57.3 per cent YoY to 99,000 tonnes after the government imposed a Rs77 per litre petroleum development levy and a Rs2.5 per litre carbon levy in July 2025. These measures raised FO prices by about Rs85,000 per tonne, pushing generation costs to around Rs54 per kilowatt-hour at 40 per cent efficiency, effectively making furnace oil-based power generation unviable.

Among individual refineries, National Refinery Limited (NRL) reported an 11.3 per cent YoY increase in total sales to 108,000 tonnes. Its diesel volumes grew 30.6 per cent, while MS sales rose nearly 75 per cent, reflecting a shift towards lighter, higher-margin products. FO output was largely phased out, dropping 99.5 per cent year-on-year.

Attock Refinery Limited (ATRL) faced operational constraints due to crude supply issues linked to elevated system pressure on the SNGPL gas network. Its total sales fell 26.4 per cent YoY to 97,000 tonnes, with MS and FO down 13.7 per cent and 94.3 per cent, respectively. Diesel sales increased 18.4 percent, partially offsetting the decline. ATRL’s market share slipped to 12 per cent, slightly below its historical average of 14 per cent.

Pakistan Refinery Limited (PRL) recorded a 10.2 per cent YoY decline in total volumes, while Cnergyico (formerly Byco) saw the sharpest fall, down 35.3 percent due to weaker diesel and FO demand. Despite a 3.9 per cent rise in MS sales, Cnergyico’s utilisation remained the lowest in the industry.

Overall refinery production in September stood at 866,000 tonnes, up 1.0 per cent YoY. Diesel output rose 7.1 per cent to 432,000 tonnes, while MS declined 3.3 per cent to 197,000 tonnes, and FO fell 8.1 per cent to 190,000 tonnes. The average utilisation rate for the sector improved to 50.7 per cent from 43.5 per cent in August, with diesel accounting for nearly half of total throughput (49.9 per cent).

Among major refineries, ATRL and PRL operated at 65.8 per cent and 63.2 per cent utilisation, respectively — both above their historical averages. NRL maintained operations at 40.9 per cent, while Cnergyico continued to lag at 13.5 per cent.