Govt dusts off oil refining policy as Hormuz disruptions bite

The government has now assured the refining sector of corrective measures in the upcoming budget to revive $6 billion in investments for refining upgrades and expansion. Pakistan is losing up to $2bn in annual foreign exchange due to expensive petroleum product imports instead of crude. The refining policy returned into the limelight after Finance Minister Muhammad Aurangzeb, at a recent meeting, assured the management of the refineries that the government was serious about removing hurdles to implementing both greenfield and brownfield refining policies amid a loss of $1bn per month on oil imports amid the war. The minister said the matter would be addressed during the upcoming IMF visit for corrective policy action in the budget for the financial year 2026-27. A follow-up meeting between the representatives of the refineries was held at the petroleum division on Monday, where they were asked to submit their updated positions without delay. Petroleum Minister Ali Pervaiz Malik conceded that “despite the issuance of both refining policies in 2023, progress on implementation has remained stalled”. He said removing bottlenecks was crucial to moving forward, adding that the government considered local refineries as critical national assets for an uninterrupted fuel supply and energy security. “The ongoing regional situation arising from the US-Iran conflict has further highlighted the urgency of reducing reliance on external