KARACHI: According to industry insiders quoted by The News on Thursday, Pakistan shipped 90,000 tonnes of fuel oil in May 2023 to reduce a massive stock that had grown over the previous few months despite little domestic demand.
An economic slowdown and cold/moderate weather, particularly in the central and northern parts of the country, have contributed to a lack of growth in fuel oil consumption, which is why sources estimate that fuel oil exports reached 250,000 tonnes in the last three months (March to May). They predict that there will be an increase in exports in the coming days. Pakistan now maintains a stock of more than 510,000 tonnes of fuel oil, which is kept by local refineries, power plants, and oil marketing organisations (OMCs). Around 40% of the nation’s stock, or 200,000 tonnes, is held by power plants, followed by OMCs with 180,000 tonnes, and refiners hold the remaining stock.
In the month of May 2023, Pakistan Refinery Limited (PRL) exported 40,000 tonnes of fuel oil while Pak Arab Refinery Limited (PARCO) shipped 50,000 tonnes, according to sources in the oil industry.According to the sources, refineries have been exporting fuel oil to keep the operations of their plants operating smoothly, and they have been doing so even at a price that is lower than the local fuel oil price.
They emphasised the Rs35,000 per tonne disparity between the local and international prices of fuel oil. However, refineries have been shipping their stockpiles to ensure the seamless operation of their operations, which would have been negatively impacted otherwise.
According to the sources, of all the refineries, PARCO and PRL had the largest stock of fuel oil, and they chose to export it since they had given up on improving local fuel consumption in the near future.They claimed that despite a significant drop in fuel oil power generation in April compared to the same month last year, the domestic market conditions for neighbourhood refineries continued to be unfavourable. Fuel oil was used less frequently to generate power during the first 10 months of the current fiscal year, a decline of more than 60%. According to the sources, Pakistan was importing fuel oil to meet local demand during the same time period of the previous financial year, making the current fiscal year’s fuel oil exports significant.