Agreements for the upgrade of Pakistan's refineries are likely to be signed in the first week of September 2026 as the government finalises the documents. People familiar with the refinery policy said most of the information shared five days ago regarding the upgradation process remains valid, but the timeline for signing the agreements has shifted. "Do not expect the upgradation agreements to be signed by the end of August now," an official said, adding that one of the pending issues involved opening the required bank accounts in consultation with the Finance Division and the Controller General of Accounts.
The official expressed hope that the remaining issues will be resolved shortly and that the agreements will be signed during the first week of September 2026. The refinery upgradation agreements are considered a key step towards implementing the government's long-awaited refinery policy, aimed at modernising the country's refining capacity and increasing the production of cleaner petroleum products. However, refinery companies have urged the government to waive a penalty imposed on refineries for delays in signing agreements under the Brownfield Refinery Upgradation Policy, arguing that the delay is not attributable to them and can cost individual refineries billions of rupees.
A senior representative of a refinery said the refinery upgradation policy has taken nearly seven years to finalise and undergone several changes under successive governments and ministers. He said the Brownfield Refinery Upgradation Policy was initially approved in August 2023 and subsequently amended in February 2024. "We had agreed to proceed with the programme and provided bank guarantees of Rs1 billion each to the Oil and Gas Regulatory Authority (Ogra)," he said.
The refineries are also ready to open escrow accounts and complete other formalities well before the deadline, he said. According to the representative, Ogra has informed the Petroleum Division in writing that the refineries are ready to sign the upgradation agreements and that a signing ceremony was expected to be held in the presence of the prime minister. However, the implementation process was disrupted after the Finance Act 2024 exempted petroleum products from sales tax, making the upgradation projects financially unviable.