Hi Everyone! I hope you are all doing well. Welcome back to another blog. In this blog, we will talk about, Pakistan’s May Fuel Oil Exports. In May 2023, Pakistan exported 90,000 tons of extra fuel oil because the demand within the country had been low in recent months. According to a national newspaper, the total fuel oil exports from March to May 2023 amounted to 250,000 tons.
Since the consumption of fuel oil hasn’t increased, more exports are planned in the near future. Currently, there are over 510,000 tons of fuel oil stored in Pakistan by oil marketing companies (OMCs), power stations, and local refineries.
Power plants hold approximately 40 percent of the nation’s stock, which is equivalent to 200,000 tons. OMCs (Oil Marketing Companies) follow closely with 180,000 tons, and the remaining stock belongs to refiners. In May, Pak Arab Refinery Limited (PARCO) exported 50,000 tons of fuel oil. Pakistan Refinery Limited (PRL) shipped out 40,000 tons. Refineries are exporting fuel to maintain smooth plant operations and are selling it at a lower price than the local market.
Refineries have been exporting their excess fuel stockpiles to maintain smooth operations, as the local and global fuel oil prices differed by Rs. 35,000 per ton. This helped prevent further losses to the refineries, which would have been worse if they hadn’t sold the surplus fuel.
Notably, PARCO and PRL possessed the highest amount of fuel oil among local refineries. Instead of relying on the possibility of local consumption picking up in the future, they decided to export it. Sources mentioned that the situation in the domestic market for local refineries was unfavorable. In April 2023, electricity generation from fuel oil saw a significant decline compared to the same month in the previous year.
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