Refining sector to benefit from higher GRMs amid widening spreads

• Crude-HSD spread rises to ~$55/bbl; crude-MS gap at ~$10/bbl.
• Historical average crude-product spread is $25–$30 per barrel.
• Feb 2026 refinery throughput rose 29% YoY on strong product demand.
  

Pakistan’s refining industry is poised to gain from higher gross refining margins (GRMs) as the gap between crude oil and refined petroleum product prices widens, The News reported.

Escalating geopolitical tensions in the Middle East have driven up global prices for crude oil, high-speed diesel (HSD), and motor spirit (MS), resulting in broader refining spreads.

The spread between crude oil and HSD has climbed to around $55 per barrel, while the gap between crude and MS stands at about $10 per barrel. Historically, the average spread between crude and petroleum products ranges between $25 and $30 per barrel, according to industry data.

Refinery throughput and product uplift posted a strong recovery in February 2026, with total volumes rising 29% year-on-year (YoY), driven by higher demand for MS, HSD, and furnace oil (FO), according to a report by Arif Habib Limited.

HSD uplift surged 43.7% YoY to 458,000 tonnes during the month, reflecting stronger domestic consumption, reduced inflows from Iran and improved refinery utilisation. MS volumes rose 16.9% to 223,000 tonnes on the back of firm demand and higher output.

FO uplift increased 14.3% to 162,000 tonnes. However, analysts noted that a significant portion of FO output was likely exported at a loss due to weak domestic demand. Data from oil marketing companies showed FO sales falling 16.4%YoY to 44,000 tonnes, largely due to lower FO-based power generation amid reduced hydel availability.

During the first eight months of FY26, total refinery uplift reached 7.1 million tonnes, up 12.5% YoY, supported by MS and HSD offtake, which rose 11.8% and 22.7 %, respectively.

Company-wise data showed a mixed trend in February.

Sales at Attock Refinery Limited fell 5.5%YoY to 98,000 tonnes. While HSD sales increased 14.3%, MS and FO volumes declined by 0.5% and 76.7%, respectively.

The company continued to face crude supply constraints from northern fields, weighing on MS offtake. Its market share slipped to 11.1%, below its historical average of 13.7%.

In contrast, Pakistan Refinery Limited posted a 55.4%YoY increase in sales to 147,000 tonnes, driven by growth across all major products. MS, HSD and FO volumes rose 61.1%, 46.9% and 67.6%, respectively.

Similarly, National Refinery Limited reported a 51.7% jump in sales to 113,000 tonnes, supported by sharp increases in MS (up 63.6 %) and HSD (up 77.8 %) following a planned turnaround in the same period last year.

Cnergyico PK Limited also recorded strong growth, with sales rising 81.8% YoY to 135,000 tonnes, led by MS, HSD and FO volumes, which increased 79.2%, 96.1%, and 62.6 %, respectively.