Pakistan’s largest refiner to export 50,000 mt fuel oil as demand dwindles

The Pakistan government has allowed the country’s largest refiner Pak-Arab Refinery to export around 50,000 mt of fuel oil by this month’s third week to reduce stockpiles amid dwindling demand.

The decision was communicated via a notification issued by the country’s Oil and Gas Regulatory Authority (Ogra).

Pakistan’s refineries have been exporting fuel oil stockpiles in recent years because of the government’s focus on consuming cheaper modes of electricity generation such as gas, coal, LNG, and hydel, said Farham Mehmood, head of research analyst at Sherman Securities.

Last month, Ogra had allowed three oil refineries — PARCO, National Refinery, and Attock Refinery — to export 120,000 mt of fuel during June and July to help reduce stockpiles and optimize refinery operations.

Refineries had exported around 150,411 mt of fuel oil in May, compared to 94,282 mt in the same month last year, data shared by the Oil Companies Advisory Council showed.

Pakistan did not import a single cargo of fuel oil in FY24, compared to 478,815 mt imported in FY23.

Meanwhile, electricity generation from fuel oils stood at 2,165 Gwh during the 11 months of fiscal year 2023-2024, declining by 49% from last year’s 4,260 Gwh.