KARACHI: Pakistan’s oil refining industry earned more than $1 billion from petroleum exports for the first time in the last fiscal year, industry data showed, offering a new source of foreign exchange as the country struggles with a widening trade deficit.
Refineries exported around $1.05 billion worth of petroleum products in the financial year that ended on June 30, equivalent to roughly 3.5 percent of Pakistan’s total merchandise exports of $30.1 billion during the period.
“Crossing the $1 billion export mark is an important milestone for Pakistan’s refining industry,” Cnergyico’s Vice Chairman Usama Qureshi told Arab News on Tuesday.
Pakistan’s trade deficit widened 22 percent to $39.5 billion last fiscal year as exports fell six percent and imports rose eight percent to around $70 billion, according to Pakistan Bureau of Statistics data, increasing pressure on the country to find new sources of export earnings.
“It shows that the sector can play a dual role and saving foreign exchange through import substitution while also earning foreign exchange through exports,” Qureshi added.
Pak-Arab Refinery Limited (PARCO) led petroleum exports with $277 million in the last fiscal year, followed by Cnergyico PK Limited at $258 million, National Refinery Limited at $238 million, Pakistan Refinery Limited at $200 million and Attock Refinery Limited at $73 million, according to industry data.
Industry executives say future export growth will depend partly on refinery upgrades that allow Pakistani companies to produce higher-value fuels meeting international standards, while expanding into markets beyond conventional petroleum products.
Cnergyico has entered the Very Low Sulphur Fuel Oil (VLSFO) bunkering business, supplying marine fuel to international vessels at Pakistani ports and seeking to tap demand generated by global shipping.
“Our move into VLSFO bunkering connects Pakistan’s refining industry directly with international shipping,” Qureshi said, adding: “Given Pakistan’s strategic location on major maritime routes, we see significant potential to develop the country into a competitive marine-fuels and bunkering destination.”
He said the opportunity extended beyond exporting surplus petroleum products.
“With refinery upgrades, internationally compliant higher-value fuels and a supportive policy environment, Pakistan’s refining sector can become a sustainable foreign-exchange earner,” he said.
Ahsan Mehanti, chief executive officer at Arif Habib Commodities Limited, said rising petroleum-product exports could help Pakistan narrow a trade deficit that has been aggravated by regional tensions weighing on agricultural and value-added exports.
“Surging oil exports will help reduce the country’s external account imbalance,” he told Arab News.
Mehanti said government efforts to curb cross-border oil smuggling could also improve tax collection and allow domestic refineries to make better use of spare production capacity.
“That will help rupee stability and improve employment data for industry that’s has been affected by regional unrest,” he said.
