Pakistan fuel oil exports triple in Feb as domestic demand slumps

Pakistan refineries exported three times more fuel oil — 108,564 metric tons — in February compared with 39,153 metric tons in February 2025 amid slower demand after the government mostly opted for cheaper and cleaner fuel sources such as nuclear and solar.

Fuel oil exports from Pakistan during the July 2025 to February 2026 period rose by 13% to 954,570 metric tons from 854,923 metric tons shipped during the same period in the previous year, according to data posted on the Oil Companies Advisory Council (OCAC) — the authority that compiles data on petroleum product consumption, imports and exports.

Refineries exported around 160,000 metric tons of light sulfur fuel oil during eight months of the fiscal year that started July 1 compared with 85,137 metric tons of the product in the same period of the previous fiscal year, the OCAC data said.

Prior approval for export

Last week, Nukta reported that the government has directed oil refineries to seek “prior approval” to export furnace oil, as the country aims to shore up reserves amid the ongoing U.S.-Israel-Iran war, which has severely disrupted oil flows from the Middle East.

"Any export of furnace oil (FO) shall be undertaken only after the prior approval of the Prime Minister's Committee on Monitoring Petrol Prices", according to an official document dated March 9 from the Ministry of Energy, signed by Assistant Director Usman Ali, seen by Platts on March 12.

All refineries have requested the government seeking approvals to export fuel oil, industry officials told Nukta on March 19. Fuel oil exports worth more than 120,000 metric tons are pending approvals.

PARCO, Pakistan Refinery and National Refinery have sought approvals.

Fuel oil may again be used for power generation

Pakistan typically uses furnace oil in domestic utilities, but the government has actively discouraged use of fuel oil or furnace oil for power generation, favoring cheaper alternatives such as gas, coal and renewables in recent years.

This led to mounting stockpiles at the country’s oil terminals amid limited local demand, pushing refiners to bank on exports as the only viable outlet, and transformed Pakistan from being a net importer to a regular exporter of fuel oil over the last couple of years.

Pakistan’s domestic fuel oil consumption stood at 40,000 metric tons in February, compared with 50,000 metric tons in February 2025, while total fuel oil sales in the eight months of the current fiscal year has fallen 34% year-over-year to 300,000 metric tons, according to OCAC.

Agam Kumar, research analyst at Optimus Capital Management said that the government, as a last resort, would use fuel oil to generate electricity in absence of RLNG.

Pakistan has received two cargoes of LNG in March compared with average nine to 10 cargoes per month from Qatar previously.

"Yes the electricity from fuel oil would be a costly affair compared with RLNG and coal but if the government avoids it, consumers will have to suffer massive load shedding," Kumar said. "As the war has been extended, we fear that in April, no LNG cargo is expected to arrive which would further increase the dependence on fuel oil run plants which would ultimately increase the cost of electricity."

The cost of electricity generated from fuel oil has been quite expensive, amounting to PKR 33.56/unit while RLNG cost PKR 20.16/unit, domestic gas PKR 13.59/unit and from coal (imported and domestic) PKR 12.87/unit.