Pakistan Refineries’ Profit Margins Jump More Than Fivefold in a Year

Gross refining margins in Pakistan averaged $28.8 per barrel in August 2026, sharply higher than the $5.4 per barrel recorded in the same month last year, according to industry data.

Key points

• Nevertheless, margins declined from $36.7 per barrel in July, mainly after the administration capped high-speed diesel cracks at $41.89 per barrel effective August 20.
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• Dubai crude, the benchmark applied to calculate Pakistan's GRMs, averaged around $88 per barrel in August, compared with $73 per barrel a year earlier.
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• The solid year over year improvement was primarily driven by higher petroleum product costs against the backdrop of the US-Iran war.

Nevertheless, margins declined from $36.7 per barrel in July, mainly after the administration capped high-speed diesel cracks at $41.89 per barrel effective August 20. Despite the monthly decline, refining margins remained above $20 per barrel for a second consecutive month, documented a national daily.

Meanwhile, the solid year over year improvement was primarily driven by higher petroleum product costs against the backdrop of the US-Iran war. It pushed up international energy costs and backed product cracks. The improvement came despite higher underlying crude oil rates. Bank Makramah Completes Rs. 12 Billion Sale Of Cullinan Tower.

Dubai crude, the benchmark applied to calculate Pakistan's GRMs, averaged around $88 per barrel in August, compared with $73 per barrel a year earlier. Although noted margins are calculated before duty differentials and inventory movements, GRM calculations additionally include product supplier premiums and freight charges over benchmark crack spreads.

For context, the government's intervention in the HSD market was the main factor behind the month on month decline. The $41.89 per barrel cap took effect on August 20, meaning its impact was reflected in margin calculations for the final 10 days of the month.

Meanwhile, the improvement comes as Pakistan's refining sector undergoes major changes, with policymakers seeking to improve refinery economics, reduce reliance on imported petroleum products and encourage investment in refinery upgrades.

Although their sustainability will depend on global crude costs, petroleum product cracks, freight rates and administration pricing policies, the stronger margins are projected to provide some relief to local refineries.

For context, the August average was more than five times the $5.4 per barrel recorded a year earlier, highlighting the significant improvement in refining margins over the past 12 months. Refinery industry representatives, nevertheless, stated higher GRMs should not be interpreted as a major growth in refinery profitability. Stay Connected with ProPakistani.

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For now, pakistan Refineries' Profit Margins Jump More Than Fivefold in a Year remains the part of the story worth watching, and further updates are likely as more details are confirmed.