Pakistan refinery sales fall 7% in May as diesel demand weakens, smuggling rises

Pakistan's refinery product sales declined 7.0% year over year in May 2026, weighed down by a sharp drop in high-speed diesel (HSD) and furnace oil (FO) offtake, as industry officials pointed to lower purchases by oil marketing companies and rising fuel smuggling.

Total refinery uplift fell from the same month last year, with HSD sales dropping 19.1% to 409,000 tons. Industry analysts attributed the decline to weaker demand from oil marketing companies and an increase in cross-border smuggling driven by higher domestic diesel prices.

Recent industry estimates suggest that about 5,000 tons of HSD are smuggled into Pakistan daily, compared with total national demand of roughly 22,000 tons per day. The volume represents nearly 23% of the country's diesel consumption, underscoring the growing challenge facing the formal petroleum sector.

Motor spirit (MS), commonly known as petrol, remained relatively resilient, with sales rising 4.3% year over year to 247,000 tons in May.

Refinery Sales Remain Strong in FY26

Despite the monthly decline, refinery sales during the first 11 months of fiscal year 2025-26 remained strong.

Total refinery uplift reached 9.9 million tons during July-May FY26, up 10.4% from a year earlier. The increase was driven by stronger demand for both petrol and diesel, with MS sales rising 10.8% and HSD sales increasing 17.1% year over year.

Attock Refinery Records Sharp Decline

Sales at Attock Refinery Limited fell 16.6% year over year to 112,000 tons in May.

The refinery's petrol sales rose 26.6% to 50,000 tons, but diesel sales declined 12.9% to 44,000 tons, while furnace oil sales plunged 78.5% to 8,000 tons. The company's market share slipped to 12.1%, below its historical average of 13.7%.

Pakistan Refinery and National Refinery Post Gains

Sales at Pakistan Refinery Limited increased 3.4% year over year to 144,000 tons in May, supported by a 30.6% rise in furnace oil volumes.

Meanwhile, National Refinery Limited reported a 21.2% increase in sales to 135,000 tons, driven by stronger petrol and furnace oil demand. Petrol sales rose 13.1%, while furnace oil volumes nearly doubled, climbing 99.3% from a year earlier.

Cnergyico Sales Decline

Sales at Cnergyico PK Limited fell 11.5% year over year to 152,000 tons in May.

The decline was attributed to weaker demand for both petrol and diesel, with MS volumes dropping 22.3% and HSD sales falling 17.7% from the same period last year.

Refinery Production Jumps 22.5%

While sales weakened, refinery production rose sharply, indicating a buildup in inventories.

Total refinery production increased 22.5% year over year to 1.01 million tons in May. Diesel production rose 17.6% to 492,000 tons, petrol output increased 14.4% to 242,000 tons, and furnace oil production climbed 37.9% to 224,000 tons.

Industry analysts said the increase in production alongside weaker sales suggests refiners are accumulating inventories as market demand slows.

Refinery Utilization Improves

The refining industry operated at a utilization rate of 59.2% in May, up from 58.1% in April and 48.3% in May 2025.

Diesel accounted for 48.7% of total refinery throughput during the month, while petrol and furnace oil contributed 24.0% and 22.2%, respectively.

Among major refiners, Pakistan Refinery recorded the highest utilization rate at 73.5%, followed by Attock Refinery at 69.3% and National Refinery at 57.0%.

Cnergyico posted the lowest utilization rate at 22.4%, although its diesel and petrol throughput improved compared with historical averages.

Industry participants said the combination of rising refinery output, weak diesel demand and increasing fuel smuggling remains a key challenge for Pakistan's downstream petroleum sector as the fiscal year enters its final month.