KARACHI: The refining sector has halted the export of fuel oil after a surge in domestic demand driven by lower hydropower generation and colder weather, industry officials said on Thursday.
The country's fuel oil consumption rose to 8,000-10,000 tonnes per day in January, up from less than 4,000 tonnes per day a few weeks ago, when refineries were exporting the surplus.
“Fuel oil demand picked up after canal desilting started in the country, which stopped the release of water from dams, thus bringing down the hydel power generation on the lower side,” an official said.
He said the drop in hydropower output was the main factor behind the increased use of furnace oil-based power plants to meet the electricity demand. The extreme weather conditions also played a role, as the shortage of gas led to lower power generation from gas-fired plants.
"The fog in various parts of the country, especially in the populous province of Punjab, boosted the gas consumption for heating purposes." Another official said the consumption of fuel oil in the country ranged from 8,000 tonnes to 10,000 tonnes per day, which was less than 4000 tonnes a few weeks ago when refineries were exporting it.
Power plants were not buying fuel oil from the local refineries in the first half of the current fiscal year due to low demand. “Now the situation has reversed as the refineries did not entertain the offers for the export of fuel oil recently,” the official said.
He said one refinery cancelled the plan to export 50,000 tonnes of fuel oil a few days ago and another refinery had been selling all its fuel oil in the domestic market. "One refinery had 50,000 tonnes of fuel oil at Port Qasim, which it had imported a few weeks ago, but now Pakistan State Oil (PSO) has been approaching it to buy the product for the power plants."
According to oil export data, the country exported over 160,000 tonnes of fuel oil in December, the highest monthly figure, taking the total export of fuel oil to 460,000 tonnes in the first half of the current fiscal year. The low consumption of fuel oil had increased in every month of this fiscal year, but the export will fall in January, officials said.
