Pakistan to export over 160,000 mt fuel oil in March after Feb outflows drop

Pakistan plans to export over 160,000 mt of fuel oil in March, industry sources said, as the country's oil refineries aim to reduce stockpiles amid weak domestic demand.

The South Asian country exported a record monthly high of 189,457 mt of fuel oil in January, followed by shipments of around 38,777 mt in February, according to data from the Oil Companies Advisory Council -- the authority that compiles data on petroleum product consumption, imports and exports.

Cnergyico Pk Limited plans to export nearly 65,000 mt of fuel oil in March, Pak Arab Refinery Ltd (PARCO) around 50,000 mt, Pakistan Refinery nearly 25,000 mt, while Attock Refinery plans to export nearly 30,000 mt of low sulfur fuel oil during the month, industry sources said in the week ended March 21.

The refineries currently hold stocks of 186,860 mt of fuel oil, with Cnergyico holding 68,180 mt, PARCO 67,067 mt, Pakistan Refinery 38,144 mt, National Refinery 11,369 mt and Attock Refinery 2,100 mt. Attock Refinery also holds stocks of 38,144 mt of LSFO, the industry sources said.

In recent years, the Pakistani government has discouraged the use of fuel oil in running domestic utilities, prompting refineries to increase exports. Traditionally a net importer of fuel oil, Pakistan now exports the residual fuel grade, adding to regional supplies.

Power generation from fuel oil-fired power plants plunged to 261 GWh in the first eight months of the current fiscal year, between July 2024 and February 2025, compared with 2,103 GWh generated in the same period last year, data from state-run National Electric Power Regulatory Authority showed.

The government aims to increasingly switch to cheaper alternatives to generate electricity. According to official government data, as of March, the cost of generating electricity from a fuel oil-fired power plant was Pakistan Rupees 35/unit, Rupees 22.35/unit from regasified LNG and around Rupees 18.90/unit from imported coal.

Fuel oil consumption in February declined 9% year over year to 53,000 mt, compared with 58,000 mt in the same month last year, OCAC data showed.

In the eight months of the current fiscal year to Feb. 28, consumption fell 43% to 458,000 mt compared with 795,000 mt in the same year-ago period, according to the data.

Pakistan's fuel exports in the eight months ended Feb. 28 jumped 70% to 933,595 mt, against 549,973 mt in the corresponding period a year earlier, OCAC data showed.

The Asian high sulfur fuel oil market, which has rallied in recent weeks thanks to robust demand and tight availability, has started to witness potential downsides as recent strength in fundamentals has attracted arbitrage supplies into Singapore, adding to regional stockpiles.

HSFO bunker demand appears moderate at best, and feedstock demand for the residual grade remains sluggish, trade sources said.

Platts, part of S&P Global Commodity Insights, assessed the Singapore 380 CST HSFO cargo's cash differential over Mean of Platts Singapore 380 CST HSFO assessments at a premium of $16.51/mt March 20, down for a fourth consecutive session, from $16.76/mt on March 19. The benchmark HSFO cash premium was at its lowest since March 4, when it was assessed at a premium of $15.69/mt.

Platts assessed the Singapore 180 CST HSFO cash premium over MOPS 180 CST HSFO assessments at a premium of $11.76/mt March 20, down from $14.50/mt in the preceding session, weighed by a competitive offer from Trafigura during the physical trade window. The 180 CST HSFO cash differential was at its lowest since Feb. 26, when it was assessed at $10.87/mt.

The 180 CST HSFO grade, widely used in the power generation sector in South Asian countries such as Bangladesh and Sri Lanka, is expected to garner strength gradually ahead of the peak summer months from April onward.