According to sources, PARCO the vessel carrying the heavy fuel left for a foreign destination from Port Qasim on Thursday evening. Although refineries had tried to find buyers for their furnace oil stock in the last two months, they were not able to sell it owing to weak world demand, despite floating low-priced tenders.
Sources said it was the first furnace oil export by PARCO since the crisis had started a few months ago. Shahid Mahmood Khan, Managing Director PARCO, actively pursued the sale in the international market, following a slump in demand from domestic power producers, which led to the accumulation of furnace oil stock. “MD PARCO did a great job by exporting furnace oil to the international market for keeping the refinery operational…,” sources in the sector said.
PARCO had stored the stock at Port Qasim last month followed by two other refineries. The furnace oil storage crisis has eased a bit after an uptick in domestic demand. The average current price of furnace oil at local refineries is Rs95,000/tonne, whereas import parity price (IPP) stands at Rs107,000/tonne. Industry officials said a huge difference in local and import parity prices had made it difficult for refineries to sell their production.
Although, stocks were still high, demand was picking up and huge stocks of furnace oil would be sold in the coming days, the added. “K-Electric (KE) is burning 2,000 tonnes of furnace oil daily and demand from this power utility as well as from other power plants is picking up,” industry sources said. During November-December period last year, two to three refineries opted to shut down operations to avoid losses and were forced to cut down prices to sell furnace oil in the local market, but to no avail.
