Fuel Oil Exports Set to Cross Record 150,000 Tons in December 2023

Pakistan’s fuel oil exports are tipped to cross 150,000 tons in December 2023 due to poor local demand and stagnated electricity production in recent months. In November, Pakistan exported 115,000 tons of fuel oil, well over October’s monthly record of 75,000 tons. In December, exports are tipped to cross 150,000 tons as local refineries prepare to offload a massive backlog of fuel oil, according to a national daily. Pakistan Refinery Limited (PRL) is expected to export 25,000-30,000 tons of fuel oil in the remaining days of this month, while Attock Refinery Limited (ATL) intends to export 25,000-30,000 tons of fuel oil. Pak Arab Refinery Limited (PARCO) intends to export 50,000-55,000 tons, followed by 45,000-50,000 tons by Cnergyico Limited this month. The refining sector has chosen to export fuel oil after amassing a considerable stock. Winter is here and temperatures have dropped dramatically, curbing electricity demand and massively cutting the use of fuel oil in power generation. Notably, refineries sell fuel oil at a loss on the international market than on the domestic market. Fuel margins are undesirable when compared to diesel and petrol, and Pakistani refineries have no choice but to offer fuel oil on the cheaper. This requires refineries to remain operational or they would have to close down, as seen last winter.