Furnace oil price up by Rs 17000 per ton

Aftab Ahmed

The price of furnace oil has jumped up by Rs 17000 per ton today following demand in the local market and a hike in prices globally.

Last month, the price of furnace oil stood at Rs 75,000 per ton before tax that had jumped up to Rs 92000 per ton today in the local market.

Now, the price after tax stands at Rs 108000 per ton today that stood at Rs 88000 per ton last month.

Due to the rise in demand for furnace oil following dry docking, the l stocks of furnace oil have dropped to the lowest level at 24000 tons that stood at 54000 tons last month.

Due to depleting furnace oil stocks, the oil refineries had the opportunity to increase their production.

Earlier, they were operating at a low level due to higher stocks of furnace oil as the power sector was not ready to pick them.

Earlier, Pakistan State Oil (PSO) had canceled a tender for the purchase of furnace oil due to a higher offer price of more than Rs 120,000 per ton in response to a bid.

At that time, the furnace oil price stood at Rs 75000 per ton on the local market. Due to a paucity of supplies during the summer season, PSO got a bid for furnace oil above Rs 120,000 per ton. Due to the replacement of Engro FSRU, the demand for furnace oil had increased in Pakistan.

The Engro FSRU had been capable of handling 600 mmcfd of LNG. The country’s gas supply had dropped as a result of its replacement that led to rising demand for furnace oil in the power sector. As a result, demand for furnace oil increased, thereby raising the price of furnace oil in the local market.

PSO had floated a bid to import furnace oil. However, the bidders had quoted a price of more than Rs 120,000 per metric ton, which was more than double the price of furnace oil, hovering at Rs 75000 per metric ton in the country.

The demand for furnaces had increased as the summer approaches. Following the dry dock of the LNG terminal on June 30, the country required more energy generation, and hence more furnace oil.