Pakistan's fuel oil exports rise 75% in first 5 months of FY25

Pakistan's fuel oil exports in the first five months of fiscal year 2024-25 (FY25) recorded an appreciable growth of 75% compared to the same period last year as refineries speed shipments to lower stocks and help bolster output of other petroleum products.

Fuel oil exports during July to November rose to 520,589 metric tons as against 297,868 metric tons during the same period last year, according to the data received from Oil Companies Advisory Council, an authority which compiles data of petroleum products consumed, imported, and exported.

The refineries also exported light sulfur fuel oil amounting to 55,806 metric tons during the five months ended November 30 compared to not a single cargo shipped in the same period a year ago, the data said.

Discouraging fuel oil use

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

Electricity generation from fuel oil in the five months ended Nov 30 amounted to 149 gigawatt-hours (GwH) compared to 1,185 Gwh produced in the same period in the corresponding year, according to data received from the National Electric Power Regulatory Authority, a state-run authority which complies data related to electricity consumption and sets prices.

Not a single unit of electricity was generated from fuel oil in either this November or the last one, the data revealed.

Fuel oil consumption declined sharply by 37% to 310,000 metric tons in the five months ended Nov 30 compared to 480,000 metric tons of the same period in the corresponding year, OCAC data revealed.

Conversion of Pakistani refineries

In August 2023, the Pakistan government introduced a policy that calls on local refineries to completely halt production of fuel oil and opt for Euro-V motor gasoline 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.

Fuel stocks at refineries jumped by 55% to 173,900 mt compared with 111,760 metric tons held a month ago, according to data received from industry sources.

PARCO currently has stocks of over 83,600 metric tons , National Refinery around 35,000 metric tons, Pakistan Refinery around 29,600 metric tons, Cnergyico nearly 23,100 metric tons and Attock Refinery nearly 2600 metric tons, said the data.

Pakistan crude oil imports in the five months ended Nov 30 climbed by 17.8% to 3.974 million metric tons as compared with 3.373 million metric tons of the same period last year, according to data received by Pakistan Bureau of Statistics.

Attock Refinery, in a briefing to brokerage companies' analysts on Nov 8, disclosed that the company had exported around 80,000 mt of light sulfur fuel oil in FY24.

Exports were made to address reduced ullage/throughput issues, AKD Securities, a Karachi based brokerage firm, said in a report.

The company receives a $60-$70/mt premium over the prevalent export price of RFO, the report said. Consequently, the refiner plans to export cargo of 30,000 mt each month moving forward.