The Oil and Gas Regulatory Authority (Ogra) has granted Cnergyico Pakistan Limited (CPL) approval to export 40,000 metric tonnes (MT) of high-sulphur furnace oil (HSFO) this month due to excess stock and reduced domestic demand.
In a letter to CPL, Ogra authorized the export of 20,000MT from Kemari port in the coming days, with another 20,000MT scheduled for the fourth week of December 2024.Â
The decision reflects a continued shift in Pakistan’s energy policy, as power plants reduce reliance on furnace oil for electricity generation due to its high cost. According to official data, current furnace oil stock stands at 387,000MT. Oil Marketing Companies (OMCs) hold 206,500MT, while refineries have 66,500MT. Additionally, 86,700MT is stored in the Papco pipeline system, and 27,000MT in the Parco pipeline system.
Among refineries, Pak Arab Refinery Limited (Parco) holds the largest stock at 32,300MT, followed by CPL with 24,200MT. National Refinery Limited, Pakistan Refinery Limited, and Attock Refinery Limited hold 5,500MT, 2,900MT, and 1,400MT, respectively.
In response to declining domestic demand, Pakistan has significantly increased furnace oil exports, reaching a record 430,000MT in the first four months of the fiscal year.Â
Monthly exports included 116,000MT in July, 66,500MT in August, 114,000MT in September, and 133,700MT in October.
Electricity generation from furnace oil dropped by 87% during this period compared to last year, with its use in October being nearly negligible. This decline aligns with the government’s push toward cost-effective and sustainable energy alternatives.
Under Pakistan’s new refining policy, refineries are expected to cut high-sulphur furnace oil production by 78%, reducing daily output from 15,500MT to 3,400MT following planned upgrades. However, progress on these upgrades has been delayed due to disagreements over sales tax exemptions on petroleum products in the current fiscal year.
