Refineries to export 130,000 tonnes of furnace oil in October

KARACHI: Three refineries will export a combined 130,000 tonnes of furnace oil in October after receiving approval from the Oil and Gas Regulatory Authority (Ogra).

Cnergyico Pakistan Limited (CPL) will export 55,000 tonnes during the month, while Pak-Arab Refinery Limited (Parco) will export 50,000 tonnes and Pakistan Refinery Limited (PRL) 25,000 tonnes, according to Ogra’s approval letter seen by The News.

The regulator’s decision reflects the continued decline in domestic consumption of furnace oil, which has created room for exports. Industry officials said as much as 95 per cent of current production is now being exported as local demand has “almost vanished”. Average daily output of all refineries is estimated at 6,400 tonnes, with total monthly production at around 200,000 tonnes.

They attributed the slump in local sales to the imposition of petroleum and carbon levies in the current fiscal year’s budget, which have made the fuel more expensive domestically. Instead of generating higher revenue, the levies have reduced sales and eroded tax collection, they added.

While furnace oil’s role in power generation had already been shrinking in recent years, the new levies further discouraged local use and pushed refiners towards exports. Officials noted that exports may provide short-term relief but questioned the long-term viability of furnace oil production.

Pakistan exported more than 1.4 million tonnes of furnace oil in the last financial year. In the first two months of the current fiscal year, exports reached 280,000 tonnes -- including 69,625 tonnes in July and almost 111,000 tonnes in August.

Electricity generation from furnace oil has also plummeted due to its high cost. In August, only 92 megawatts were produced from furnace oil, out of a total generation of 14,218 megawatts.