Pakistan’s fuel oil exports drop in Q3 amid higher domestic power demand

Pakistan exported around 279,882 mt of fuel oil in the third quarter of 2025, nearly 6% lower year over year, the latest data from the Oil Companies Advisory Council showed.

Refineries exported 27,537 mt of low sulfur fuel oil during the quarter, about 2.8% higher year over year, the data showed.

The drop in Pakistan's fuel oil exports comes on the back of firmer domestic demand from some of the fuel oil-fired power generation plants, partly due to a recent increase in natural gas prices, according to a refinery official.

Power generation from fuel oil surged to 297 GWh in Q3, about 102% higher compared with 147 GWh during the same period in 2024, according to the latest data available from the National Electric Power Regulatory Authority. Domestic consumption of the fuel declined 78% year over year to 50,000 mt in the quarter, OCAC data showed.

The total stockpiles of fuel oil held by the refineries stood at around 147,000 mt at the end of October, with a bulk of the volume held by Pak Arab Refinery Ltd., amounting to 104,000 mt, while Pakistan Refinery has around 19,000 mt and National Refinery and Cnergyico have stocks of 12,000 mt each, according to data received from the refineries.

Pakistan's oil refineries were estimated to have shipped about 120,000 mt of the residual fuel grade in October and plan to export more than 100,000 mt of fuel oil in November, refinery officials said in the week that began Nov. 3.

Cost of power generation; potential alternatives

On average, the cost of power generation from fuel oil costs nearly Rupees 32/unit, while the cost of generation from RLNG is around Rupees 22.7/unit, coal nearly Rupees 13/unit, from domestic gas-fired utilities is about 13.10/unit, and from nuclear is Rupees 2/unit, according to data collected from the National Electricity Power Regulatory Authority.

Pakistan's oil refineries would likely export up to 90% of the fuel oil produced in the current fiscal year, as the government's latest budget has imposed a petroleum development levy of around Pakistan Rupees 82,077/mt and carbon tax of Rupees 2,665/mt to discourage the usage of fuel oil in domestic industries, accelerating the pace of exports, said another refinery official.

In the fiscal year ended June 30, 2025, Pakistan's refineries produced around 2.457 million mt of fuel oil, compared with 2.47 million mt in the previous fiscal year, while fuel oil exports rose to 1.3 million mt from 820,000 mt, OCAC data showed. Pakistan's exports of LSFO rose about 2% year over year to 137,880 mt, according to the data.

Pakistan's biggest oil refiner Cnergyico imported its first cargo of US crude, amounting to 1 million barrels, reported by Platts, part of S&P Global Energy, Oct. 30.

Refineries are betting on alternate crudes as feedstock to lower the volume of fuel oil output and ramp up production of diesel and gasoline, said one industry official.

Asian market fundamentals

The Asian HSFO market has come under pressure due to ample supplies, but robust downstream bunker demand and relatively limited supplies of non-sanctioned material will partly support the fundamentals in the near term, according to market sources.

The Asian LSFO market is also seeing more than adequate supplies and lackluster downstream bunker demand.

Platts assessed the Singapore 380 CST HSFO cargo's cash differential to the Mean of Platts Singapore 380 CST HSFO assessment at a discount of $6.06/mt at the Asia close Nov. 5, compared with a discount of $6.03/mt Nov. 4, amid ample selling interest during the Platts Market on Close assessment process.

The cash differential for the benchmark HSFO grade was currently at its biggest discount since July 31, when it was assessed at minus $6.35/mt, Platts data showed.