Pakistan exports over 1 million tonnes of furnace oil in FY26 amid falling domestic demand
January shipments reach 114,217 tonnes as higher levies and energy mix shift reduce local consumption
Pakistan exported more than one million metric tonnes of furnace oil during July–January FY2025-26 as domestic demand declined following higher taxation and changes in power generation sources.
Oil sector data showed that refineries exported 114,217 metric tonnes in January alone. Industry officials said the exports reflect a surplus in the local market, where furnace oil consumption has decreased due to fiscal measures and reduced use in power generation.
In the FY26 budget, the federal government imposed a higher petroleum levy on furnace oil along with a climate support levy. The additional charges increased domestic prices, making furnace oil less competitive compared to alternatives such as regasified liquefied natural gas, coal and renewable energy.
Refineries, including Pak-Arab Refinery Company, National Refinery Limited, Pakistan Refinery Limited, Attock Refinery Limited, and Cnergyico, have been exporting surplus volumes to manage rising inventories and avoid storage constraints. Officials said exports have become necessary to maintain refinery operations amid weak local offtake.
Furnace oil is a residual product generated during refining. Without major upgrades to refinery configurations, local refineries continue to produce high volumes of high-sulphur fuel oil. With limited domestic demand, overseas markets have become the primary outlet.
Reference Link:- https://profit.pakistantoday.com.pk/2026/02/21/pakistan-exports-over-1-million-tonnes-furnace-oil-in-fy26-amid-falling-domestic-demand/
Zamir Ahmed Awan is the founder and Chair of the Global Silk Route Research Alliance, a think tank in Islamabad. He studied engineering at Shanghai University in the 1980s, and years later he went back to China as Pakistan's science counsellor in Beijing, from 2010 until 2016, working on science and higher education cooperation between the two countries.…
