ISGS to execute refinery policy

Capacity concerns raised as bureaucracy shifts responsibility for upgrade programme

ISLAMABAD:

The government has designated Inter State Gas Systems (ISGS) as the policy implementation entity for the Pakistan Oil Refining Policy for Upgradation of Existing/Brownfield Refineries, 2023, shifting key responsibilities from OGRA to the state-owned company amid questions over its capacity. Sources in the Petroleum Division said the decision reflected reluctance within the ministry's bureaucracy to directly handle the multibillion-dollar upgrade programme. Officials opted to assign the task to ISGS rather than take responsibility for executing and monitoring the policy.

Sources also questioned whether ISGS possesses the technical and institutional capacity required, saying the company may not be adequately equipped for the responsibilities being assigned.

A Petroleum Division letter dated August 24, 2026, designated ISGS to implement the policy on behalf of the division and perform functions assigned to the Petroleum Division under the policy.

The move gives ISGS a central role in the upgrade programme, under which existing refineries are expected to undertake major investments to modernise their plants.

The policy allows refineries to execute upgrade agreements with an entity designated by the division. It also provides for the constitution of a Project Management Unit (PMU), comprising technical and financial experts, to ensure smooth implementation. "The decision to designate ISGS followed a meeting chaired by the petroleum secretary on August 17," the letter stated.

ISGS will be responsible for executing upgrade agreements, opening Refinery Upgrade Accounts, monitoring projects, hiring consultants and auditors, and making incentive payments from the upgrade accounts.

Industry officials said these functions carry significant technical and financial responsibilities because the implementation entity will have a key role in overseeing projects and administering incentives linked to refiners' investments. The decision has raised questions over whether ISGS has the required expertise and resources to perform the expanded mandate, particularly given the technical complexities involved in refinery modernisation.