Local refineries are hesitant to import Russian crude oil since global prices for furnace oil have plummeted.
The refineries seek Russian crude oil at a reduced price because the rate for the previous shipment is no longer practically viable since the price of furnace oil has dropped globally.
Furnace oil prices fell to $60 per barrel from $80 per barrel in early December, rendering it unsustainable for local hydro skimming refineries, reported a national daily.
Domestic demand for furnace oil has nearly evaporated, and the local refineries have amassed a massive stockpile which they have made available for sale to foreign buyers. Since Russian crude oil produces more furnace oil as a bi-product, it will be impossible to import it while having a large supply of furnace oil to export at low costs.
In December, the refineries exported a huge amount of furnace oil to stay afloat. So far this month, Pakistan Refinery Limited (PRL) has exported 35,000 tons of fuel oil, Cnergyico over 70,000 tons, and Pak Arab Refinery (PARCO) has exported 100,000 tons.
December sales figures show fuel oil sales were 34 percent lower than the same month last year and 33 percent lower than November 2023. Pakistan and Russia inked an agreement at the beginning of this year for crude oil imports to Pakistan, and the country placed its first order in April.
In June, PRL purchased its first cargo of 100,000 tons of Russian crude. In October and November, Cnergyico Refinery imported two shipments of Russian crude oil totaling 110,000 tons.
