No power from fuel oil in October, exports surge to all-time high

KARACHI: Pakistan's fuel oil exports soared to a record high in November as domestic power generation from the product plummeted, industry officials said on Wednesday.

The country shipped 125,000 tonnes of fuel oil in the first three weeks of November, almost matching the total exports of 146,000 tonnes in the previous four months. The shipments are the highest monthly export volume ever, surpassing the previous record of 75,000 tonnes in a single month.

The surge in exports came as local refineries faced a glut of fuel oil due to low electricity production from the product. In October, the country did not produce any electricity from fuel oil, down by 100 percent from a year earlier, according to power production figures.

The refining sector had to find new markets for the surplus fuel oil to keep the refineries running and meet the rising demand for diesel and petrol for local consumption, especially during the harvesting season.

Earlier this month, the regulator asked the refineries to operate at full capacity to ensure adequate supply of petroleum products, particularly diesel. "For the production of diesel in huge quantity for local consumption, refineries have to operate at maximum capacity and this is only possible when furnace oil extracted from crude oil is disposed of," an industry official said.

The official said that fuel oil exports jumped massively in November compared to the previous month of October. The country exported 46,000 tonnes of fuel oil in October. "This is a record export of fuel oil in a month, as previously Pakistan's export of this product in one month was 75,000 tonnes."

Pak Arab Refinery Limited was the largest exporter of fuel oil in November, shipping 50,000 tonnes, followed by Cnergyico Limited with 40,000 tonnes and Pakistan Refinery Limited with 25,000 tonnes.

Pakistan has produced low electricity from fuel oil in the current fiscal year. During the first four months, the electricity produced from furnace oil registered a decline of 62 percent. "This trend continues as there is no demand for fuel oil in the country for power generation and it is finding its way into the international market," the official said. Last year, refineries had to shut down after large stocks of fuel oil piled up during the winter season.