Islamabad: Pakistan’s listed refinery sector posted a combined profit of Rs54.8 billion in FY2025-26, compared with a loss of Rs10.5 billion in the previous fiscal year, driven by stronger petrol and diesel refining margins and higher sales volumes.

According to a report by Arif Habib Limited, sector revenue increased 27 percent year-on-year to Rs1.54 trillion from Rs1.22 trillion in FY25. Gross profit surged to Rs107.4 billion from Rs10.4 billion, taking the gross profit margin to 7 percent from 0.9 percent. The sector’s net profit margin stood at 3.6 percent.

The rise in revenue was supported by higher fuel prices. Ex-refinery prices of motor spirit (petrol) increased 17 percent year-on-year, while high-speed diesel (HSD) prices rose 19 percent.

Refinery activity also improved during the year, with total petroleum product output rising 13.4 percent to 11.2 million tonnes. Overall capacity utilisation increased to 55 percent from 48 percent in FY25. Diesel production rose 17.2 percent, while petrol output increased 12.4 percent. As a result, diesel’s share of total production increased to 50.3 percent from 48.6 percent a year earlier. Furnace oil’s share, meanwhile, declined to 21.1 percent from 23.1 percent, while jet fuel’s contribution increased to 4.9 percent from 4.4 percent.

Total refinery sales increased 8.6 percent to 10.8 million tonnes. Diesel sales rose 13.6 percent and petrol sales increased 11 percent. Furnace oil sales, however, declined 7.8 percent due to weaker demand from the power sector.

Arif Habib Limited said the expansion in refining spreads was a key factor behind the sector’s earnings recovery. The diesel margin against Arab Light crude increased to $29 per barrel from $9.7 per barrel a year earlier, while the petrol margin rose to $7.4 per barrel from $2.9 per barrel.

The report attributed part of the sharp increase in diesel margins to supply disruptions and procurement difficulties following the onset of the US-Iran conflict in March 2026.

At the company level, Attock Refinery Limited (ARL) reported a profit of Rs22.1 billion, up 85 percent year-on-year, and announced a cash dividend of Rs17.50 per share.

Pakistan Refinery Limited (PRL) posted a profit of Rs15.8 billion, compared with a loss of Rs4.7 billion in FY25. The improvement came despite a 1.7 percent decline in sales volume, as stronger refining margins supported earnings.

Cnergyico PK also returned to profitability, reporting a profit of Rs10.8 billion against a loss of Rs2.9 billion a year earlier. Its petroleum product sales increased 12.3 percent during the year.

National Refinery Limited (NRL) earned Rs6.2 billion, compared with a loss of Rs14.9 billion in FY25. According to the report, NRL’s earnings were impacted by around Rs13.5 billion in policy and accounting charges.

The sector’s earnings recovery was largely concentrated in the first three quarters of FY26, with profitability weakening sharply in the final quarter. Sector-wide gross profit fell to Rs8.0 billion in 4QFY26 from Rs72.2 billion in the preceding quarter.

Despite the decline in quarterly gross profit, sector revenue increased 27 percent to Rs530.8 billion in the fourth quarter, according to the Arif Habib Limited report.