ISLAMABAD -- Pakistan's major oil refineries reported a nearly twentyfold surge in combined profit for the latest quarter through September, benefiting from increasing refining margins amid global energy disruptions.

The strong earnings are expected to be short-lived, experts say, adding that it is also unlikely to provide the companies sufficient funding for the costly modernization of the country's aging refineries.

According to disclosures to the Pakistan Stock Exchange, all four listed Pakistani oil refineries reported extraordinary increases in net profits for the quarter, with their combined net profit exceeding 57 billion rupees ($206 million), compared with 2.9 billion rupees in the corresponding quarter last year. That's a gain of more than 1,860%.

The top earner was Attock Refinery, based in Rawalpindi, which recorded an after-tax profit of 18.65 billion rupees. Pakistan Refinery, operating in Karachi, ranked second at 13.97 billion rupees, followed by Cnergyico Pk at 12.88 billion rupees, and National Refinery at 11.57 billion rupees.

Cnergyico Pk recorded a net loss in the same quarter the previous year, so its percentage growth cannot be calculated, but the other three posted more than 1,000% increases.

Pakistan's fifth refinery, Pak-Arab Refinery, is not listed and has not released a financial statement.

The big gains come as fuel prices rise due to the ongoing Middle East conflict between the U.S. and Iran, on top of the long-running Ukraine war, resulting in a global fuel shortage and hitting Pakistani consumers hard. According to government fuel-price notifications as of Oct. 20, petrol prices had risen 47.6% since the start of the war, while diesel prices jumped 41.2%.

Meanwhile, the refineries enjoyed "unusually high refining margins" during the quarter, according to a research report by Sherman Securities, a Pakistani brokerage house.

Waqas Ghani, head of equity research at Karachi-based JS Global Capital, said the refineries also benefited from selling petroleum products that were refined from crude purchased earlier at lower prices. "Geopolitical disruptions to crude and refined-product supplies pushed product prices up faster than crude costs, widening refining margins and boosting profitability," he told Nikkei Asia.

To ease pressure on consumers, the government first introduced a temporary cap on diesel refining margins in April at $41.50 per barrel but removed the cap in May after international refining margins normalized. The government reintroduced the cap at $41.89 per barrel in August and lowered it to $38 on Oct. 20. It has set no cap on petrol margins. The refining margin is the gap between the wholesale diesel price and the international crude oil price.

The government has also been adjusting retail diesel prices daily based on an international benchmark-linked formula. Before July, adjustments were made fortnightly.

"Refineries could benefit from higher margins and inventory gains, while consumers face the impact of rising international prices, exchange rate pressures and domestic taxation," Khalid Waleed, a research fellow at the Sustainable Development Policy Institute in Islamabad, told Nikkei Asia.

But the unusually strong earnings look to be unsustainable. "These profits are driven by extraordinary geopolitical conditions and should not be extrapolated indefinitely," Ghani said.

Other analysts also point out that even the recent earnings surge is not enough to cover the cost of modernizing aging refineries.

Osama Rizvi, a global market and product strategist at Primary Vision, a U.S.-based energy market consultancy, said Pakistan needs to convert its current refineries into hydrocracking refineries that produce high-value fuels such as diesel and gasoline from lower-value heavy oil.

"The current refinery system of Pakistan produces more furnace oil and less high-speed diesel," Rizvi said, "whereas we need more high-speed diesel and less furnace oil." He added that the recent profits are not enough to finance the shift.

Aftab Zafar, chair of the Pakistan unit of the Association of International Energy Negotiators, concurred. "One or two quarters of profitability," he said, "cannot finance [refinery] transformation."

Zafar pointed to another potential hurdle. "The policy framework behind it," he said, "has to provide sufficient confidence to the market to commit capital over the long term." Adnan Aamir is a contributing writer.