Fuel oil exports soar fourfold to record 278,000T in FY23

KARACHI: Pakistan's fuel oil exports jumped over fourfold to a record 278,000 tonnes in the current financial year, from 48,985 tonnes in the previous year, industry sources said on Tuesday.

In the month of June, the last cargo of fuel oil was exported by Pakistan Refinery Limited (PRL) when it shipped 26,000 tonnes of the commodity, oil industry people stated.

According to the statistics of fuel oil export compiled by the industry, in the first eleven months of the current fiscal year, Pakistan exported 252,000 tonnes, whereas with the latest shipment by PRL, its total exports jumped up to 278,000 tonnes.

The first shipment of fuel oil was exported in December 2022 when huge stocks piled up at the refineries, compelling them to seek out international buyers for the domestically produced fuel oil.

In March 2023, Pakistan exported 23,044 tonnes of fuel oil followed by 80,000 tonnes in April this year. An increase was recorded in the month of May, when 94,000 tonnes of fuel oil were exported. June saw another consignment of 26,000 tonnes leaving the Pakistani docks.

Oil industry people said that two refineries – PRL and Pak Arab Refinery Limited (PARCO) – exported the commodity in the current fiscal year, as their domestically produced stockpiles of furnace oil had become massive.

Export of fuel oil by Pakistani refineries was unprecedented in terms of quantities, as the country had never exported the commodity on this scale, industry people said.

It should be noted that the local consumption of fuel oil fell drastically after power plants refused to stockpile the commodity for electricity generation. However, the refusal of the power plants came on the back of the federal government’s decision to demote furnace oil on the bottom of the merit list of fuels to be used for electricity generation on account of higher cost.

“Furnace oil makes power more expensive for the local consumers,” they added. They said that the efficiency of power plants producing electricity from furnace oil was low compared to the plants producing power from gas.

“A furnace oil-based power plants’ efficiency level comes around 30 to 35 percent, whereas the gas-based power plants have efficiency level around fifty to sixty percent. This is the reason that fuel oil is not being consumed in the country and refineries have its huge stocks,” they said.

The oil industry people also noted that despite severe load-shedding affecting consumers across the country, the government was not pushing power plants to consume the costly fuel oil for power generation purposes.