KARACHI: Pakistan shipped 90,000 tons of fuel oil in May 2023 to reduce a huge stock built up over the last several months amid low demand in the country, industry sources told The News on Thursday.
Fuel oil exports reached 250,000 tons in the last three months (March to May), according to the sources, who foresee more exports in the coming days as the consumption of fuel oil has not seen any increase, thanks to an economic slowdown and cold/moderate weather, especially in central and north parts of the country. Pakistan currently has over 510,000 tons of fuel oil stock, which is being held by oil marketing companies (OMCs), power plants, and local refineries. Power plants in the country have a stock of around 40 percent or 200,000 tons, followed by OMCs with 180,000, whereas refiners have the rest of the stock.
According to sources in the oil sector, Pak Arab Refinery Limited (PARCO) shipped 50,000 tons of fuel oil and Pakistan Refinery Limited (PRL) exported 40,000 tons of fuel oil in the month of May, 2023.The sources revealed that refineries have been exporting the fuel oil to keep the operations of their plants running smoothly, and have been exporting it in the global market even at a lower price compared to the domestic price of fuel oil.
They pointed out that there was a difference of Rs35,000 per ton in the local price and global price of fuel oil. But refineries have been shipping their stocks for smooth running of operations, which, otherwise would have been badly affected.
The sources said PARCO and PRL had the major stock of fuel oil of all the refineries and they opted for its export after having no hope that local consumption of fuel oil would improve in the coming days.They said the domestic market conditions for local refineries remained unattractive, with power generation from fuel oil in April experiencing a massive decline compared to the same month last year. During the first ten months of the current fiscal, power generation from fuel oil plunged by over sixty percent. The sources said the fuel oil exports during the current fiscal year were noteworthy as during the corresponding period of the previous financial year, Pakistan was importing fuel oil to meet local demand.