Pakistan Refinery Limited (PRL) is a public limited company established in 1960 and listed on the Pakistan Stock Exchange. The company operates as a subsidiary of Pakistan State Oil (PSO), which maintains a controlling stake of 63.56%.

Pakistan Refinery Limited (PRL) was incorporated in May 1960 and operates as a hydro-skimming refinery with a designed processing capacity of 50,000 barrels per day. The company’s main refinery complex is located at Korangi Creek Road, Karachi, while its storage facilities are situated at Keamari, Karachi. PRL plays an important role in supplying refined petroleum products to local oil marketing companies, with Pakistan State Oil Company Limited, its parent company, being a major customer.

PRL refines both imported and domestically sourced crude oil to produce petroleum products including High-Speed Diesel (HSD), Motor Gasoline (MS), Jet Fuel, Kerosene, and Furnace Oil. The refinery complex includes a Crude Distillation Unit, Hydrotreating Unit, Platformer Unit, and Isomerization Unit.

Pakistan State Oil (PSO) continues to be the majority shareholder, holding 63.56% of the company’s equity. The remaining shares are distributed among financial institutions and general public investors.

The association with a government-linked entity provides PRL with a degree of operational stability and facilitates access to banking facilities. The Group’s longstanding presence in the industry reflects its strong commitment, sectoral expertise, and strategic capability within the energy domain.

The presence of PSO contributes to industry-specific expertise and strengthens strategic decision-making capability. It also supports operational efficiencies, particularly in crude oil sourcing and product offtake, while PSO’s dominant market position ensures steady lifting of key products such as HSD and MS.

The Company's sponsors have the ability and willingness to support the entity on a continuing basis, and in times of crisis. The sovereign support of the government in the shape of PSO, has further enhanced this notion.

PRL's Board comprises eleven members, led by Chairman Tariq Kirmani and Managing Director & CEO Mohsin Ali Mangi, along with directors Aftab Husain, Syed Jehangir Ali Shah, Mohammad Abdul Aleem, Shahbaz Tahir Nadeem, Mohammad Zubair, Tara Uzra Dawood, Zafar Abbas, Zafar Ul Islam Usmani, and Jawwad Ahmed Cheema. During 2QFY26, Mr. Zahid Mir served as MD/CEO until December 31, 2025, after which the leadership transitioned to Zafar Ul Islam Usmani, and subsequently Mohsin Ali Mangi now heads the Company. Governance oversight is supported through established Board committees, including the Audit & Risk Committee comprising four members (one non-executive director and three independent directors), chaired by an independent director, which held four meetings during FY25 with satisfactory board attendance. The framework is further strengthened by the Human Resources & Compensation Committee and the Project Steering Committee, ensuring structured supervision across key functional areas.gb

The Board of Directors at PRL comprises seasoned professionals with diverse experience across their respective fields, enabling effective strategic oversight and governance. The Board is chaired by Mr. Tariq Kirmani, an industry veteran with extensive experience in the energy sector, while management is led by MD/CEO Mr. Mohsin Ali Mangi, who brings strong technical and operational expertise, succeeding Mr. Zafar Ul Islam Usmani who had been serving as Interim Managing Director & Chief Executive Officer. The Board composition reflects balanced representation across engineering, finance, and public-sector governance, supporting informed decision-making and strategic direction.

Governance performance remains stable and consistent. The Project Steering Committee has been actively monitoring the Refinery Expansion and Upgrade Project (REUP), with progress advancing toward financial close targeted by early 2027. The board continues to engage with potential strategic investors and Development Financial Institutions (DFIs) to secure the most cost-effective financing options for the project.

Auditor KPMG Taseer Hadi & Co. has provided an unqualified opinion for FY25. Interim statements are fully compliant with IAS 34, with deviations noted only where the Companies Act 2017 supersedes IFRS, all of which have been explicitly disclosed. The nine months report ending March 31, 2026 reflects sound disclosure quality.

PRL’s organizational architecture is based on a well-defined departmental structure with clearly established reporting lines. All key functions report directly to the MD/CEO, ensuring centralized oversight and streamlined accountability. The core departments include Operations, Engineering, Refinery Upgrade Project (REUP), Finance, Information Technology, Technical and Inspection, Commercial, Contracts and Procurement, Human Resources, and HSEQ, while Legal and the Company Secretary function also report to the MD/CEO through defined governance channels.

Each division within the Company is led by a General Manager and a Deputy General Manager who have been associated with the organization for a significant period. Their long-standing affiliation provides them with deep expertise and a comprehensive understanding of the Company's operations, enabling effective management and ensuring continuity. The management team is headed by MD/CEO Mohsin Ali Mangi, who previously held the position of Chief Strategy and Technology Officer at Pakistan State Oil Company Limited. He is supported by an experienced refinery leadership team, reflecting strong leadership continuity. The management team has demonstrated commendable tactical agility, particularly in securing crude oil from alternative sources and effectively optimizing refinery throughput amid challenging market conditions.

Management has proactively aligned production runs with prevailing market conditions, maintaining throughput at approximately 60–65% utilization to avoid Furnace Oil accumulation. This disciplined operational approach reflects management effectiveness in optimizing refinery operations in line with demand dynamics.

MIS SAP-ERP integration continues to function actively across Finance and Procurement modules, further supporting operational efficiency.

The Company remains fully committed to the reliability and accuracy of financial reporting and the transparency of transactions in line with established procedures and best practices. The scope of internal audit is clearly defined, encompassing the review and evaluation of internal control systems across the organization. PRL also undertakes periodic audits and risk assessments of its processes, operations, and products to support the setting and monitoring of objectives and targets, with a focus on enhancing HSEQ standards and loss control. On the HSEQ front, the Refinery achieved 10.6 million man-hours without any Lost Time Injury (LTI), reflecting a strong culture of operational discipline and safety.

Pakistan's refining sector witnessed a strong recovery during 9MFY26, driven by higher refinery upliftment, improved product cracks, and stronger MS and HSD sales volumes. Industry-wide refinery production increased notably on a year-on-year basis in April 2026, while average capacity utilization also improved compared to the prior year.Sector profitability recovered strongly during 9MFY26, with listed refineries collectively reporting net profits of approximately PKR 43 billion against losses of PKR 6 billion in the prior period. However, the sector experienced a sharp reversal in April 2026 following a government-mandated cost-plus diesel pricing mechanism effective April 1, which capped crack spread realizations well below prevailing market levels. With Dubai crude near USD 110 per barrel and diesel at approximately USD 160 per barrel, four listed refineries collectively absorbed approximately PKR 24 billion in losses during April alone. Petrol margins remain thin at approximately USD 9 per barrel, while furnace oil margins are deeply negative at around minus USD 40 per barrel, forcing the export of HSFO at a loss. A 5% customs duty on imported crude oil, against which only 2.5%–3% is recoverable through the deemed duty mechanism, further compounds margin pressure.n parallel, the USD 6 billion national brownfield refinery upgrade program has been reinvigorated by the Middle East supply crisis, reflecting in a high-level meeting in early May 2026 with OGRA to resolve the policy hurdles blocking financial close. Once resolved, domestic refining capacity is projected to rise from approximately 21–23 million tons per year to nearly 33 million tons by 2035, dramatically strengthening Pakistan's energy self-sufficiency. PRL, as the only refinery to have both executed its Upgrade Agreement with OGRA and opened the joint Escrow Account, remains the most advanced among peers in REUP readiness and is best positioned to benefit once policy clarity is restored.

PRL is among the smaller, low-complexity players in Pakistan’s refining sector, with a current installed refining capacity of around 50,000bpd out of the country’s total refining capacity of approximately 448,400bpd. Within this landscape, PRL ranks as one of the lower-capacity refineries. However, its Refinery Expansion and Upgrade Project (REUP) is aimed at significantly enhancing its competitive position through Euro-V compliance, improved middle-distillate yields, and a reduction in furnace oil output. The project also envisages a near doubling of processing capacity, which is expected to materially strengthen PRL’s scale and market standing within the domestic refining sector.

For the nine months ended March 31, 2026, PRL recorded gross sales of PKR 333.91bln, with net revenue of PKR 234.40bln after deductions including excise duty and petroleum levy (PKR 81.30bln), incremental escrow incentives (PKR 7.60bln), surplus price differential (PKR 5.13bln), Climate Support Levy (PKR 2.65bln — a new levy with no prior-period equivalent), and sales tax (PKR 2.52bln). Comparable net revenue in 9MFY25 was PKR 235.96bln. Despite a marginally softer net revenue figure, gross profit rose dramatically to PKR 25.49bln from just PKR 0.29bln in the prior period, driven by crude-slate optimization, the introduction of Bonny Light crude from Nigeria, improved middle distillate yields, and management’s proactive procurement from alternate sources to maintain uninterrupted operations amid Middle East supply disruptions. Revenue concentration remains a feature: two customers account for 60.4% of total revenue, with PSO (the parent) recording gross product purchases of PKR 114.39 bln during the nine months.

Refining margins recovered significantly during the nine months ended March 31, 2026. Gross profit rose to PKR 25.49bln from PKR 0.29bln in the comparable period, while profit after tax reached PKR 12.08bln compared to a loss of PKR 4.59bln. Finance costs of PKR 3.25bln weighed on net margins but remained manageable relative to the strong gross profit base. For Q3FY26 alone (January–March 2026), net revenue was PKR 97.39bln with net profit of PKR 9.94bln, reflecting a strong quarter supported by elevated HSD and MS crack spreads and high utilization levels. However, the sharp reversal in next quarter is expected following the revised diesel pricing mechanism—indicates volatility in near-term profitability, with some normalization expected in subsequent months. Petrol margins of around USD 9 per barrel and persistently negative furnace oil margins continue to remain structural pressures on earnings.

PRL's sustainability profile is primarily anchored in its crude slate optimization strategy, which has played a key role in enhancing refining margins and operational resilience. The Company's shift toward lighter, low-sulphur crudes, including the first procurement of Bonny Light from Nigeria in Q1FY26, materially improved middle distillate yields and supported a turnaround in profitability. This strategy was further sustained through 9MFY26 by diversifying crude sourcing to ensure uninterrupted operations amid regional supply disruptions, while maintaining optimized utilization levels that improved over the period. Complementing this operational strategy, the sustainability framework is reinforced by the Brownfield Refinery Policy 2023, which provides structured incentives for Euro-V upgrades, including 10% on Mogas, 2.5% on HSD reinvestment margins, and a 7.5% deemed duty on HSD for 20 years post-commissioning.The February 2024 amendment further strengthened the framework by extending the incentive period to seven years and increasing escrow withdrawal limits to 27.5% of project cost. PRL has executed its Upgrade Agreement with OGRA (November 2023) and maintains a joint escrow balance of PKR 11.4bln as at March 31, 2026, providing financial backing for the Refinery Expansion and Upgrade Project (REUP).

PRL’s working capital cycle remains stretched due to high receivable concentration. Trade receivables stood at Rs. 33.17bln as at March 31, 2026, with a significant portion owed by the parent company, PSO, amounting to Rs. 22.48bln. Other receivables totaled Rs. 32.25bln, including Rs. 21.1bln on account of customs duty on crude oil reimbursable through IFEM, Rs. 9.2bln in exchange losses on FE-25 loans, and Rs. 1.74bln in unadjusted input tax receivable. On the payables side, trade and other payables stood at Rs. 97.20bln, including Rs. 9.04bln payable to the Government and Rs. 13.16bln payable to the joint escrow account. Despite the stretched cycle, the Company has secured sufficient banking lines to meet its working capital requirements, supplemented by support from the parent company, PSO, thereby ensuring liquidity adequacy.

During 9MFY26, the Company recorded a strong recovery in interest coverage, with profit before tax of PKR 20.01bln against finance costs of PKR 3.25bln, translating into a coverage ratio of approximately 6.2x, a marked improvement from the prior period loss position. Long-term borrowings declined to PKR 9.15bln from PKR 12.35bln at June 2025, with PKR 4.37bln classified as current. However, subsequent margin volatility highlights the sensitivity of coverage and profitability metrics to pricing dynamics in the refinery segment. Sustained improvement in coverage will therefore depend on the maintenance of adequate refining margins.

The Company maintained a moderate leverage position, with gearing declining supported by improved profitability and balance sheet strengthening. The equity base also improved to PKR 9.2bln from a negative PKR 2.9bln in FY25, reflecting a significant turnaround in retained earnings. Short-term borrowings stood at PKR 6.37bln, indicating reduced reliance on FE-25 foreign currency loans following substantial repayments during the period. Long-term borrowings were recorded at PKR 9.15bln. Overall, the Company's net debt position remains sensitive to sustained refinery margins. Going forward, as the refinery upgrade project progresses, an increase in leverage is expected to support project financing requirements and expansion-related capital expenditure.