Pakistan exported 90,000 tons of surplus fuel oil in May 2023 due to poor local demand in recent months.
Fuel oil exports reached 250,000 tons during March-May 2023, with more exports planned in the coming days as consumption of fuel oil has not increased, reported a national daily. Over 510,000 tons of fuel oil is now stored in Pakistan by oil marketing companies (OMCs), power stations, and local refineries.
Power plants in the nation have around 40 percent of the stock, or 200,000 tons, followed by OMCs with 180,000 tons, and refiners with the remaining stock.
In May, Pak Arab Refinery Limited (PARCO) exported 50,000 tons of fuel oil while Pakistan Refinery Limited (PRL) shipped out 40,000 tons. According to the sources, refineries have been exporting fuel to keep their plants working smoothly, and have been exporting it at a cheaper price than the local price of fuel oil.
Local and worldwide prices of fuel oil differed by Rs. 35,000 per ton but refineries have been exporting their stockpiles to ensure the seamless functioning of their operations, which would have taken an even bigger beating if the excess fuel wasn’t sold off.
Pertinently, PARCO and PRL held the most fuel oil among local refineries, and they chose to export it rather than hope that local consumption would recover later. Sources added that domestic market circumstances for local refineries remained dark, with electricity generation from fuel oil falling dramatically in April 2023 compared to the same month last year.
To note, electricity generation from fuel oil fell by more than 60 percent during the first 10 months of the current fiscal year.