• Overall refinery upliftment declined 7.0% YoY in May’26, primarily due to a significant reduction in HSD and FO offtake.
• HSD uplift fell 19.1% YoY to 409k tons, likely reflecting lower purchases by OMCs and increased smuggling amid elevated domestic HSD prices, we view. Per recent newsflows, it is estimated that around 5,000 tons/day of HSD are being smuggled into Pakistan against a total national demand of ~22,000 tons/day. This implies that smuggled volumes account for nearly 23% of the country’s overall HSD demand, indicating a significant impact on the formal fuel market.
• In contrast, MS uplift remained relatively resilient, improving by 4.3% YoY to 247k tons.
• Refinery upliftment in 11MFY26 remained strong at 9.9mn tons, up 10.4% YoY, driven by higher MS and HSD offtake, which increased by 10.8% and 17.1% YoY, respectively.

Company-wise volumes and market share

• ATRL’s sales reached 112k tons in May’26, down 16.6% YoY. MS sales improved 26.6% YoY to 50k tons, while HSD and FO sales declined by 12.9% and 78.5% YoY to 44k tons and 8k tons, respectively, amid the aforementioned reasons. ATRL’s market share declined to 12.1%, below its historical 13.7%.
• PRL’s sales, however, improved by 3.4% YoY to 144k tons in May’26, as FO volumes increased 30.6% YoY, respectively.
• NRL’s sales also improved by 21.2% YoY to 135k tons in May’26, driven by a sharp improvement in MS (13.1%) and FO (99.3%) sales.
• CNERGY’s sales, however, declined by 11.5% YoY to 152k tons in May’26, as MS and HSD volumes declined by 22.3% and 17.7% YoY, respectively.

 May’26: Refinery Production up 22.5% YoY

Industry Production, utilization and throughput

• Overall refinery production in May’26 rose 22.5% YoY to 1,010k tons, driven by higher output of HSD (+17.6% YoY to 492k tons), MS (+14.4% YoY to 242k tons), and FO (+37.9% YoY to 224k tons). This reflects elevated inventory levels, driven by declining sales volumes alongside an increase in refinery production.
• Industry HSD throughput rose to 48.7%, respectively, in May’26, while MS and FO throughput declined to 24.0% and 22.2%, respectively, versus historical averages.
• The industry operated at a utilization rate of 59.2% in May’26, compared to 58.1% in Apr’26 and 48.3% in May’25.

Company-wise Utilization and Throughput

• In May’26, ATRL operated at a utilization rate of 69.3%. HSD and FO throughput declined to 35.2% and 19.8%, respectively while MS throughput improved to 36.8% versus historical averages.
• In May’26, PRL operated at a utilization rate of 73.5%. HSD and FO throughput improved to 50.0% and 29.2%, respectively while MS throughput declined to 16.0% versus historical averages.
• In May’26, NRL operated at a utilization rate of 57.0%. FO throughput increased to 32.1%, respectively, while MS and HSD throughput declined to 14.4% and  51.5%, respectively versus historical averages.
• In May’26, CNERGY operated at the lowest utilization rate of 22.4%. HSD and MS throughput increased to 49.7% and 21.6%, respectively, while FO throughput declined to 28.7% versus historical averages.

Courtesy – AHL Research