KARACHI: Pakistan’s furnace oil export has gradually gained pace, confirmed industrial stakeholders earlier this week, with record number of shipments carrying fuel oil leaving the country in recent months as refineries sought to sell their stocks to offset drastic domestic demand cuts.
The country, which has traditionally remained dependent on furnace oil imports has shipped about 150,000 tons during March and April, while shipments containing around 100,000 tons of it are processed for export deliveries within the ongoing month, according to people familiar with the situation.
Pakistani refineries that produce around 5,000 to 6,000 tons of furnace oil per day have currently 200,000 tons of it in excess.
The major domestic consumers of furnace oil are power plants, though the current economic crisis, soaring inflation, and massive currency devaluation against the US dollar have pushed the electricity demand toward the lower side, causing local demand for furnace oil to fall below 10 percent.
Currently, out of five oil refineries, the Pak-Arab Refinery (PARCO) and Pakistan Refinery (PRL) are two major exporters of the oil from Pakistan, while others convert it into bitumen or lube.
PARCO has shipped two cargoes of 50,000 tons each and they are preparing to ship another cargo of 50,000 tons within the next couple of days, an official of the petroleum sector said on Wednesday declining to be identified. PRL officials said they were also facing a similar situation.
“We have already exported 50,000 tons of furnace oil and are planning to export another 40,000 tons in May,” the CEO of PRL Zahid Mir told Arab News. “Out of the total furnace oil production, about five to ten percent is domestically consumed while 90 percent remains unsold which is being exported.”
The PRL chief said there was hardly any requirement from the country’s power producers after November 2022, leaving refineries to look for export markets.
“We are exporting or planning to export almost 90 percent of our production,” Mir said. “The exports of furnace oil are being made at discounted prices. At present, it is being exported at around $25 below the import price of crude oil.”
He said the exports of furnace oil were being made at losses to clear the excess stock which risked the operations of the refineries if the situation continued to persist for an extended period.
“When we are exporting oil, we are doing it at a substantial loss and if we continue to make losses for an extended period of time, the operations of the refinery will not be commercially viable,” he added.
However, the PRL chief said the exports have squeezed the profit margins of the refineries as compared to domestic sales.
“Overall, the [profit] margin of the refineries becomes negative after exports and if we sell it in the local market, we do it at import parity, which minimizes our losses to a large extent,” he said.
He warned if the refineries continued to incur losses, the risk of a shutdown would increase, leading to the import of gasoline and diesel.
“Recent price cuts of petrol and diesel have also put a dent in refineries’ profit margins and has distorted our economics, so we try to produce minimum, and by doing this, the throughput also reduces and the diesel and petrol production declines.”
Keeping in view the subdued demand since November 2022, Pakistani oil refiners feared that the demand for furnace oil will completely fade out in the next one or two years.
Pakistan makes record furnace oil export as domestic demand hits rock bottom
https://arab.news/cee5p
Pakistan makes record furnace oil export as domestic demand hits rock bottom
- Pakistan has shipped around 150,000 tons of the oil in the last two months, plans to export more
- Pakistani oil refineries say they are disposing of excess furnace oil stocks at a loss, risking shutdown
Top Pakistani clerics warn government against sending troops to Gaza to disarm Hamas
- Pakistani clerics raise alarm over reports of pressure on Muslim nations to provide troops for Gaza stabilization force under Trump peace plan
- Islamabad has previously said that it is willing to join the international stabilization force but ‘not ready’ to play any role in disarming Hamas
ISLAMABAD: A group of Pakistan’s top religious and political leaders on Monday warned the government against sending Pakistani troops to Gaza to disarm Palestinian group Hamas, amid discussions over a proposed International Stabilization Force (ISF) for the Palestinian territory.
The representative gathering, chaired by prominent scholar Mufti Taqi Usmani, brought together leaders from Deobandi, Barelvi, Ahl-e-Hadees and Shia schools of thought, alongside leaders of the country’s main religio-political parties, Jamiat Ulema-e-Islam-Fazl (JUI-F) and Jamaat-e-Islami (JI).
The international stabilization force, which is to be composed of troops from Muslim countries, is the cornerstone of President Donald Trump’s peace plan for Gaza announced in Sept. Islamabad has previously said it is willing to join the ISF but “not ready” to play any role in disarming Hamas. Hamas’s Gaza chief Khalil Al-Hayya said this month the group had a “legitimate right” to hold weapons, while Israel has repeatedly insisted that Hamas be disarmed.
In a joint statement issued after the meeting in the port city of Karachi on Monday, Pakistani clerics raised alarm over reports that international pressure is mounting on Muslim-majority nations to provide troops for the transitional security force in Gaza, following Israel-Hamas ceasefire.
“In such circumstances, demands are being made to Muslim countries that they send their forces there to disarm Hamas,” the statement said. “Several Muslim governments have already refused this, and pressure is being increased on Pakistan.”
Last month, the United Nations Security Council approved Washington’s plan, which called for a yet-to-be-established Board of Peace as a transitional authority that Trump would head, and the stabilization force, which would be empowered to oversee borders, provide security and demilitarize the territory.
The gathering of Pakistani clerics urged Islamabad to resist any diplomatic overtures from Washington regarding troop deployment.
“This gathering, with full emphasis, demands the Government of Pakistan refrain from sending its forces to disarm Hamas and that it should not yield to any pressure in this regard,” the statement said.
The assembly expressed complete support for the liberation of Palestine and described the effort as a “duty of every Muslim.”
It said that Pakistan’s armed forces are “imbued with the spirit of jihad” and that the “notion of placing them against any sacred struggle for the liberation of Baitul Muqaddas or Palestine is impossible for the nation to accept.”
The religious leaders characterized the proposal as a “conspiracy” from which the government must “protect the country.”
Pakistani foreign office spokesperson Tahir Andrabi and the prime minister’s spokesperson for foreign media, Mosharraf Zaidi, did not respond to Arab News requests for comment on the statement.
Washington reportedly views Pakistan as a prime candidate for the ISF, given its experience in high-intensity border conflicts and internal counter-insurgency operations.
Last week, Pakistan’s foreign office said that Islamabad had not taken any decision on joining the proposed stabilization force for Gaza and had received no formal request from the US or any other country in this regard.
“I am not aware of any specific request made to Pakistan. We will inform you about any development if it takes place,” Andrabi told reporters.
He also sought to distance the government from rumors of a pending visit by Pakistan’s defense forces chief, Field Marshal Asim Munir, to the US to meet President Trump.
