KARACHI: In a major development, Pakistan has become an exporter of furnace oil as a prominent refinery’s ship loaded with the fuel is scheduled to leave Karachi Port on Tuesday (today).
A source at The Karachi Port Trust (KPT) said that oil tanker Roy Maersk has been currently being loaded with furnace oil and anchored at berth Op-2 on Sunday. It is scheduled to leave the Karachi Port on Tuesday. It was Byco’s cargo, the source added. Byco refinery has planned to export about 25,000 tons of furnace oil. A market source the ship is destined to an oil-rich Middle Eastern country. The source added that the refinery was exporting the cargo through a Dutch-based international oil trading firm, which had a significant stake in a local oil marketing company and had storage operations in Pakistan.
The Petroleum Division official said late last week refineries stocks were piled up to the level of 105,000 tonnes in December 2019, which have now been reduced to 40,000 tons due to furnace oil consumption by power producers.
Refineries are supplying furnace oil to power producers through oil marketing companies (OMCs) while the OMCs procure furnace oil from the refineries as per demand of power producers.
This isn’t a profitable trade, its a negative delta trade. is not adding economic value to Pakistan or the exporters. Only reason, is the useless inventory that was piled up and had no buyers in market, and those who did buy (IPPs) never paid on time (circular debt) Thats why only option left was to export.
thank you for reasoning out the background.