The Oil and Gas Regulatory Authority (OGRA) has authorized Cnergyico Pakistan Limited (CPL) to export 40,000 metric tons (MT) of surplus furnace oil (HSFO) this month.
OGRA has granted permission for the export of 20,000 MT of HSFO from Kemari port in the coming days, with another 20,000 MT scheduled for shipment in the fourth week of December 2024, reported a national daily.
This decision comes as domestic demand for furnace oil has sharply declined, with power plants reducing its use for electricity generation due to its high cost.
Current data reveals that Pakistan holds 387,000 MT of furnace oil stock. Oil Marketing Companies (OMCs) hold 206,500 MT, refineries 66,500 MT, and 86,700 MT stored in the PAPCO pipeline system and 27,000 MT in the PARCO pipeline system.
Pakistan’s focus has shifted towards exporting furnace oil as its domestic role in power generation has significantly diminished. A record 430,000 MT of furnace oil was exported in the first four months of the current fiscal year, with monthly exports reaching 116,000 MT in July, 66,500 MT in August, 114,000 MT in September, and 133,700 MT in October.
Local refineries are expected to reduce their furnace oil production by 78 percent. However, delays in these upgrades persist due to disagreements over sales tax exemptions on petroleum products for the current fiscal year.