The FO
stocks have been accumulating since the start of last winter when power demand
shrunk. Power plants are still not lifting furnace oil as electricity
generation is mainly coming from hydel and nuclear sources, which have cut the
demand of fuel oil for power generation.
The attempts by refineries to export furnace oil did not
prove lucrative because of low price. Refineries determined it was financially
unviable to export FO, as it could eat up their profits if the fuel was
exported in the international market at a low price.
According
to the sources in the oil sector, total 632,000 FO stocks include 539,080 tons of
useable stocks and 93,147 tons of dead stocks.
Pakistan’s
oil marketing companies (OMCS) currently hold 203,879 tons of furnace oil
stocks, which is 32% of total stocks. The country’s power sector holds 202,280
tons of the fuel oil stocks with it, which is 33%, while local refineries have 220,068
tons, which is 35% of the total stocks.
The
breakup of FO with the local refineries shows that PARCO holds 116,004 tons,
National Refinery Limited has 32,327 tons and Pakistan Refinery 44,455 tons,
Attock Refinery 16,826 tons, and Cnergyico has 10,457 tons of FO stocks.
The present FO stock is huge and is making the operations of
local refineries vulnerable because it has been interrupting their operational
capacity. They said that if the FO stocks were not lifting, it could further
lead towards a shutdown of refineries’ operations.
On exporting the FO, industry people said that PARCO
exported 60,000 tons and PRL exported 25,000 tons but the export price was not
lucrative. The price in the global market is on the lower side and it can cause
financial issues for the refineries if the stocks are exported at this price.
The situation is not attractive for the local refineries as
power generation from FO in the month of February slumped by 80% compared to
the same month of last year and in the first eight months of the current
fiscal. Electricity production from FO also decreased by 50% compared to the
same period of the last financial year.
