Pakistan exported a record 189,000 tonnes of furnace oil in January 2025, marking a 113% increase compared to the same month last year and a 47% rise from December 2024. This surge comes as the country’s power sector continues to reduce its reliance on furnace oil due to high costs and environmental concerns.
Cumulative exports of furnace oil surged 63% to 895,000 tonnes during the first seven months of the current fiscal year (7MFY25) compared to the same period last year.
The sharp rise in exports follows the government’s decision to permit refineries to offload surplus furnace oil in international markets, as domestic power plants increasingly switch to alternative energy sources.
Data from the first half of FY25 (July-December 2024) shows that furnace oil now plays a negligible role in Pakistan’s energy mix, accounting for just 0.2% of total electricity generation, a steep decline from 2.0% in the same period last year. Meanwhile, power generation costs from furnace oil have increased by 5% year-on-year.
To align with the evolving energy landscape, Pakistan’s refineries are working to significantly reduce furnace oil production. Under the new refining policy, high-sulphur furnace oil output is expected to decline by 78%, cutting daily production from 15,500 metric tonnes to 3,400 metric tonnes after planned upgrades.
However, the implementation of these upgrades has been delayed due to disagreements over sales tax exemptions on petroleum products in the current fiscal year. With the domestic market continuing to move towards more efficient and sustainable energy alternatives, the trend of rising furnace oil exports is expected to persist.
