KARACHI: Cnergyico Pk Limited (CPL) will export 60,000 metric tonnes (MT) of furnace oil this month, following recent exports by two other refineries.
“We will export 60,000MT this month. The first export consignment of fuel oil will be 30,000MT,” a top refinery official told The News.He noted that the company has sought permission from the Oil and Gas Regulatory Authority (Ogra) for this export, and it is expected to be granted within a day or two.
The official also revealed that another consignment of 30,000MT is being prepared for export and will be shipped abroad during the current month.CPL follows the recent exports of furnace oil by Pak Arab Refinery Limited (Parco) and Pakistan Refinery Limited (PRL). Parco exported 50,000MT of furnace oil a few days ago, while PRL exported 26,000MT on Tuesday.
The refining sector is exporting fuel due to a sharp drop in domestic consumption in recent months. Refineries continue to produce fuel oil despite its low consumption because brownfield refineries generate this oil while processing crude oil to extract diesel and petrol.
Currently, refineries hold a total of 290,000MT of fuel oil. Parco has the largest share, with over 135,000MT, followed by Attock Refinery with 53,000MT. CPL has a stock of 45,000MT, while PRL and National Refinery Limited (NRL) have 36,000MT and 18,000MT, respectively.
In addition to the refineries, the power sector holds 194,000MT of fuel oil, and oil marketing companies (OMCs) possess 108,000MT. The total fuel stock in the country is approximately 590,000MT.
In the first month of the current fiscal year, refineries exported around 116,000MT of fuel oil. With fuel oil being a lower priority for power production, it is rarely used for electricity generation and is instead exported.The new refining policy aims to reduce furnace oil production once refineries are upgraded.
The policy seeks to cut the output of high-sulphur fuel oil by 78 per cent, from 15,500 tonnes per day to 3,400 tonnes per day. It also plans for a significant reduction in fuel oil production capacity at refineries, with upgraded facilities expected to produce more gasoline and diesel from crude oil. However, refinery upgrade agreements have been delayed due to the sales tax exemption on petroleum products in the current fiscal budget.