Pakistan refineries to export more than 160,000 tons of fuel oil in March

Pakistan refineries are expected to export more than 160,000 tons of fuel oil in the current month aiming to reduce stocks and spin off production of diesel and petrol steadily after domestic consumption slumped.

Cnergyico has planned to export nearly 65,000 tons of fuel oil, Pak-Arab Refinery (PARCO) around 50,000 tons, Pakistan Refinery (PRL) nearly 25,000 tons, and Attock Refinery nearly 30,000 tons of light sulphur fuel oil, industry sources said on Tuesday.

The refineries currently hold stocks of 186,000 tons of fuel oil where Cnergyico holds stocks of 68,180 tons, PARCO 67,067 tons, PRL 38,144 tons, National Refinery 11,369 tons, and Attock Refinery 2,100 tons. Meanwhile, Attock Refinery holds stocks of 39,000 tons of light sulphur fuel oil.

The Pakistan government has been discouraging usage of fuel oil for more than three years to run electricity generation plants, forcing refineries to export the shipments.

Electricity generation from fuel oil-fired power plants plunged to 261 gigawatt-hours (Gwh) in the eight months of the current fiscal year compared with 2,103 Gwh generated in the same period last year, according to the data of National Electric Power Regulatory Authority, a state-run company which fixes electricity prices and compiles data of electricity generation.

Overall, electricity generation in the eight months of the fiscal year declined by 3% to 81,739 Gwh compared with 84,426 Gwh produced in the same period in the previous year, the data said.

The government switched to cheaper fuel to generate electricity. The cost was around PKR 35 per unit while from Liquified Natural Gas it was around 22.35 per unit, imported coal PKR 18.90 per unit and gas PKR 13.36 per unit, data said.

The demand from the fuel oil electricity generating plants fell which led to the drying up of consumption in domestic usage.

Fuel oil consumption in February declined by 9% to 53,000 tons as compared with 58,000 tons during the same month last year, according to the data of Oil Companies Advisory Council, the authority which compiles data of consumption, imports and exports.

In the eight months of the current fiscal year to Feb 28, the consumption showed a fall of 43% to 458,000 tons compared with 795,000 tons during the same period in the previous year, the data said.

Fuel oil exports

Fuel exports in the eight months ended Feb 28 rose by 70% to 933,595 tons as compared with 549,973 tons during the same period in the corresponding year, the data from OCAC said.

In February, the shipments amounted to 38,777 tons , said the data.

Refineries exported the largest-ever shipment of high sulphur fuel oil in January amounting to 160,126 tons and 29,331 tons of light sulphur fuel oil, surpassing the previous high of 136,788 tons in 2024, according to the data of Oil Companies Advisory Council.

Pakistan refineries started exporting fuel oil from February 2022 while from December 2022, it commenced shipments on a regular basis barring a couple of months where no exports were recorded, the OCAC data said.

In August 2023, the Pakistan government introduced a policy that called for all local refineries to completely halt production of fuel oil and opt for Euro-V petrol and diesel production, a process which is estimated to take approximately four to five years to complete.

Pakistan refineries have chalked out a five-year plan, with an investment outlay of $4-5 billion, to convert the units, opting for Euro-V, eliminating throughput of fuel oil.