National Refinery Limited (NRL or the Company) was incorporated in Pakistan on August 19, 1963 as a public limited company and its shares are listed on the Pakistan Stock Exchange.

In July 2005, the Attock Group acquired a 51% stake in National Refinery Limited (NRL) and took over its management following a competitive bidding process under the Government of Pakistan’s privatization initiative.

The Company is engaged in the manufacturing, production and sale of a large range of petroleum products. The refinery complex of the Company comprises of three refineries, consisting of two lube refineries, commissioned in 1966 and 1985, and a fuel refinery added to the complex in 1977. The Company has also commissioned Diesel Hydro De-Sulphurisation (DHDS) and Isomerisation (ISOM) units during the financial years 2017 and 2018 respectively. The first and second lube refineries have a designed capacity of 568,860 and 805,000 barrels per year of Lube Base Oil respectively. Furthermore, the designed capacity of the fuel refinery stands at 17,490,000 barrels per year of Crude Oil processing. The refinery complex and registered office of the Company is situated at 7-B Korangi Industrial Area, Karachi.

Attock Group retains the majority stake (51%), through Attock refinery limited (25%), Pakistan Oilfields Limited (POL) (25%) and Attock Petroleum Limited (APL) (1%). Other major shareholders include Islamic Development Bank (~15.01%), Institutions collectively including Banks, Insurance Companies, NBFIs, Joint Stock Companies, Investment Companies, Modarabas, Mutual Funds and Trusts etc. hold (~11.40%). The general public holds (~19.63%) of the shareholding and Others is (~2.96%).

NRL’s ownership structure has remained stable over the years, with the Attock Group holding the majority stake and demonstrating commitment to continuous improvement.

The Group holds a significant position in the oil sector, spanning the entire value chain—from upstream to midstream and downstream—backed by extensive technical expertise and decades of industry experience. Its successful presence in the local market for over a century stands as a testament to its strong business acumen.

The Attock Group is backed by financially strong and reputable sponsors, notably the Pharaon Investment Group Limited Holding (PIGLH), a diversified international conglomerate with global business interests. The financial strength of the Group is reflected in its consistent profitability, and sound asset base across its portfolio companies in the oil and gas sector. These include key players such as Pakistan Oilfields Limited (POL), Attock Refinery Limited (ARL), and Attock Petroleum Limited (APL), all of which are publicly listed and financially sound.

The Board consists of eight members including four Non-Executive, three Independent and one Executive director. Fourmembers represent Attock Group while one member represents Islamic Development Bank. The current compositionof the Board adequately meets the requirements of best practices in Corporate Governance.

The Board of Directors at NRL comprises a distinguished group of seasoned professionals who bring diverse and valuable experience from their respective fields. Their collective expertise enables effective strategic oversight and strong governance.

Mr. Shuaib A. Malik, the Chairman, has been associated with the Attock Group of Companies for over forty years and possesses in-depth knowledge of the petroleum industry, covering upstream, midstream, and downstream operations. The other Board members also bring specialized experience, particularly in the oil and gas sector, enhancing the Board’s overall capability.

Together, the Board members offer a broad spectrum of expertise across industries such as energy, finance, public administration, governance, and macroeconomic policy. Their backgrounds span fiscal strategy, corporate leadership, mergers and acquisitions, and technical innovation. Many hold leadership roles in esteemed organizations and actively contribute to NRL’s governance through participation in key Board committees. Their diverse insights and extensive experience ensure strong oversight and strategic direction for the Company.

During FY24, the Board held seven meetings, attended by a majority of the Directors, to deliberate on key operational and financial matters of the Company. To ensure effective oversight and efficient governance, the Board has constituted two committees: (a) the Audit Committee and (b) the HR & Remuneration Committee. The Audit Committee held a total of four meetings during the fiscal year, ensuring diligent review and oversight of the Company’s financial reporting processes, internal controls, and compliance matters. The HR & Remuneration Committee convened one meeting during the year, focusing on matters related to human resource policies. All meetings of both committees were conducted with the full participation of their respective appointed members, reflecting the Board’s commitment to sound governance, accountability, and effective decision-making.

The Board adheres to the Code of Corporate Governance issued by SECP, which outlines principles for transparency,accountability, and ethical conduct. Being a listed company, the board ensures timely preparation and disseminationof accounts along with other material information. The Board of Directors and the management remain committed to the principles of good corporate management practices with emphasis on transparency and disclosures. A. F.Ferguson and Co. Chartered Accountants are the external auditor for the financial year ending on June 30, 2024 and will continue for FY25. They have expressed an unqualified opinion on the Company's financial statements for FY24.

The Company primarily operates through six divisions namely: a) Operations, b) People and Culture, c) Administration, d) Commercial & Strategy, e) Finance & Corporate Affairs, f) Procurement & Contracts, each of which is headed by a qualified resource. The proper hierarchal structure ensures division of tasks and ensures smooth reporting. Each divisional head reports to the CEO.

Each division within the Company is led by a Deputy General Manager or General Manager who has 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 continuity.

In June 2024, Mr. Shahid Waheed Khwaja succeeded Mr. Jamil A. Khan as CEO. Later, in December 2024, Mr. Asad Hasan was appointed as the new CEO. A seasoned executive in the oil and gas sector, Mr. Hasan brings extensive experience in leading large, complex manufacturing operations. He possesses strong strategic, technical, commercial, risk management, and leadership capabilities, with a proven track record of defining business strategies and driving long-term profitability and sustainability. Prior to joining the Company, he served as Deputy Managing Director of Operations & Engineering at Pakistan Refinery Limited (PRL).

The rest of the leadership team has been with the Company for many years and possesses in-depth knowledge of the oil and gas industry. Their collective experience continues to play a crucial role in steering the Company toward sustained growth.

The Company has leadership team in place, comprising all functional heads. The team meets on a fortnightly basis and ensures smooth refinery operations as well as formulating new strategies to deal with developments in the refinery sector.

NRL has employed ERP ECC-6, developed by SAP. The Company generates MIS reports on a daily, fortnightly and monthly basis. These mainly include daily cash position, daily production report, saleable stock position, treasury and accounts section MIS, debtors aging, monthly management accounts and expense reporting. NRL has developed an in-house system – Crude Oil Management System for recording functions pertaining to oil movements and purchases of crude oil. NRL uses in-house reports in balancing crude oil inventory.

The Company is fully committed to reliability and accuracy of financial statements and transparency of transactions in accordance with established procedures and practices. The scope of internal auditing within the Company is clearly defined which broadly involves review and evaluation of its’ internal control systems. NRL conducts periodic audits and risk assessment of its activities, processes and products for setting and reviewing its objectives and targets to provide assurance, to improve HSEQ standards and loss control.

Pakistan’s combined refining capacity stands at 19.8mln metric tons per annum (MTPA). During FY24, the total consumption of refined petroleum products—including Motor Spirit (MS), High-Speed Diesel (HSD), Kerosene, Jet Fuel, and Furnace Oil (FO)—was approximately 16.5mln MTs, compared to 17.3mln MTs in FY23, reflecting a 5% year-on-year decline. This reduction was primarily driven by decreased demand, resulting from rising prices of MS and HSD, as well as a significant drop in the use of FO for power generation.

Local refineries supplied 10.06 mln MTs of petroleum products in FY24 (FY23: 8.957mln MT, meeting around 60% of the country’s total demand. The remaining requirement was fulfilled through imports.

In FY25, international crude oil prices remained volatile, rising from USD 73 per barrel in December 2024 to USD 80 in January 2025, before falling to USD 72 in March and continuing downward into April 2025. This volatility significantly impacted crack spreads, resulting in a notable reduction in gross profit margins for the period. Following the close of the reporting period, escalating global tariff-driven economic tensions triggered a sharp decline in crude oil prices, causing substantial inventory losses across the refining sector. Domestic consumption of HSD and PMG remained subdued during the quarter, prompting OMCs to scale back product upliftment amid falling oil prices. During the first nine months of FY25, total POL product consumption stood at 12.193mln MTs, slightly lower than the 13.03mln MTs recorded in the same period of the previous year. Furnace oil consumption, however, continued its declining trend in FY25. On a positive note, the sector benefited from reduced policy rates, which contributed to a decrease in financing costs. Going forward, refineries undertaking upgradation and expansion projects under the Refinery Policy are expected to bring significant benefits to the sector by enabling the production of Euro V-compliant petroleum products, improving the overall product slate, and reducing dependence on imports.

NRL is the only refinery in the country also engaged in the manufacturing and supply of Lube base oil or both domestic consumption and export. The lube refinery has an annual processing capacity of 805,000 barrels.

During FY24, the refinery achieved a throughput of 11.848mln barrels, compared to 11.729mln barrels in the previous year (as of June 30, 2023). Over the year, the Company supplied approximately 1.305mln tons of various petroleum products. In 9MFY25, the throughput of the fuel segment slightly increased to 54.16%, (52.77% 9MFY24) reflecting improved operational performance. Additionally, the lube refinery segment witnessed a growth of 20,901 MTs in local sales of Lube Base Oils. Based on its contribution to the domestic market, NRL holds an 8% market share in petroleum product supplies.

The Company reported revenue of PKR 308,841mln in FY24 (FY23: PKR 298,805mln), reflecting a meager growth of 3%. However, due to reduced product upliftment amid declining oil prices, revenues in 9MFY25 declined by 4% to PKR 225,938mln (9MFY24: PKR 236,518mln).

The fuel segment was more adversely affected by price volatility, with revenues falling by approx. 8% to PKR 166,193mln (9MFY24: PKR 179,862mln), although export revenues improved, reaching PKR 20,819mln in 9MFY25 (9MFY24: PKR 10,873mln) contributing 12% of the fuel segment revenue. For FY24, the fuel segment generated revenues of PKR 232,910mln (FY23: PKR 219,497mln).

The lube segment posted revenues of PKR 59,745mln in 9MFY25 (9MFY24: PKR 56,718mln), marking a 5% growth, with export volumes rising sharply to PKR 13,961mln (9MFY24: PKR 5,628mln). This growth is partly attributable to the higher operational days in 9MFY25, as the refinery had undergone a scheduled shut down for maintenance during FY24. Consequently, lube segment revenues for FY24 declined to PKR 75,931mln (FY23: PKR 79,307mln).

In FY24, the revenue mix was led by High-Speed Diesel (HSD), contributing 38%, followed by Furnace Oil (14%), Motor Spirit (12%), Bitumen (8%), and Lube Base Oil (7%), with the remaining 21% comprising other petroleum products.

The decline in global oil prices, which began during FY24, resulted in significant inventory losses. Consequently, the overall gross refinery margin turned (GRM) negative. This, combined with lower sales volumes and elevated finance costs, severely impacted profitability, leading to a net loss after tax of PKR 15,790mln in FY24, compared to a loss of PKR 4,463mln in FY23.

 This trend continues in 1QFY25. However, some improvement in GRM were seen in the subsequent quarters, as the gross refinery margins turned positive to PKR 4.9bln towards the end of 3QFY25. Though the pressure on margins continued due to persistently weak global demand and declining prices, keeping margins below operating expenses. This led to a gross loss of PKR 7,941mln (9MFY24: PKR 3,168mln) and a net loss after tax of PKR 14,490mln (9MFY24: PKR 7,522mln). The fuel segment reported a net loss after tax of PKR 15,058mln for 9MFY25, widening from PKR 7,815mln in the same period last year. However, segment throughput improved to 54.16% (9MFY24: 52.77%).

In contrast, the lube segment posted a profit after tax of PKR 569mln, an increase from PKR 292mln in 9MFY24, driven by a 20,901 MT increase in local sales of Lube Base Oils.  Despite some relief from benchmark interest rate cuts, the Company continued to incur elevated financing costs due to its reliance on borrowings for working capital needs and to absorb operational losses.

The Company is focusing on improving plant reliability and enhancing HSE standards & compliance to ensure operational efficiency, thereby increasing throughput sustainably. The Company is also actively working to enhance customer engagement, improve product quality, and introduce new product variants, such as industrial grade gases, slack wax and its conversion into valuable products, to target untapped domestic and export markets. During the quarter, the Company also launched MS 95 RON, a premium-grade motor gasoline. The Company is also optimizing crude costs by diversifying procurement sources. In addition, operating costs are being reduced by lowering internal refinery fuel consumption and other measures

Additionally, following the finalization of the revised Refinery Policy by the Government of Pakistan, the Company plans to embark on several key upgradation projects aimed at improving its product slate and operational efficiency, reducing Furnace oil production by converting low-value residues into high-value products and boosting gasoline production capacity while ensuring compliance with Euro-V fuel specifications.

External factors such as oil price volatility, higher freight and LC confirmation charges, and ongoing economic uncertainty continued to strain the Company’s operations and financial performance during the year. Despite a reduction in benchmark interest rates, the expected relief was offset by persistent pressures—including thin product margins, rising utility costs, and foreign exchange and inventory losses on crude oil imports. These factors drove a higher need for working capital financing, resulting in increased reliance on short-term borrowings, which stood at PKR 44,599mln in 9MFY25 and PKR 52,778mln as at FY24. The elevated borrowing levels led to higher financing costs, further weighing on profitability. The Company continues to manage its operations through a mix of equity, borrowings, and working capital optimization, aiming to maintain optimal leverage in order to improve its stressed financial position and sustain ongoing operations.

Due to the gross loss translating into higher operating losses, the Company reported negative Free Cash Flow from Operations (FCFO) of PKR 7,149mln in FY24, which further deteriorated to negative PKR 18,075mln in 9MFY25. The situation was exacerbated by elevated borrowing costs driven by increased short-term financing utilization. These factors adversely affected the Company’s overall financial performance and profitability. Consequently, key financial coverage metrics weakened, with coverage ratios turning negative to (2.3x) in 9MFY25, indicating a heightened level of financial stress.

As of March 2025, the Company is facing significant financial strain, with leverage rising to 92.7%, reflecting a heavy reliance on debt financing amid a shrinking equity base. Accumulated losses of reached to PKR 37,695mln have significantly eroded equity, with continued losses posing a serious risk of turning equity negative by the end of FY25.