Check Out the Latest Furnace Oil Prices in Pakistan 2024!

Ibn-e-Ameer

Pakistani oil refineries produce furnace oil in Pakistan. However, when its demand goes up to meet the country’s needs, Pakistan State Oil (PSO) imports it.

After LNG imports, its demand has been low due especially the use of LNG in the power sector.

Pakistani refineries like Byco and Parco have been exporting it now due to being surplus in the country.

Let’s start reading further to know the latest furnace oil prices in Pakistan.

Furnace oil prices in Pakistan 2024

Three key oil refineries PRL, Parco and NRL have been producing furnace oil. Here is a list of prices.

Furnace oil Prices in 2023

The latest price of furnace oil being produced by refineries amounts to Rs 120,000 per.

The price is lower compared to the Import parity price of about 160,000 per ton in the international market.

However, there has been no demand even at the current price of furnace oil in Pakistan.

Furnace Oil Prices in November 2022

The furnace oil prices in Pakistan had come down up to Rs 15,000 per ton in line with the fluctuation in global oil prices, effective November 1, 2022.

The local refineries also produce furnace oil, which the power sector in Pakistan uses to generate electricity.

The prices of furnace oil in Pakistan are deregulated, and refineries have a free hand to set them.

Pakistan Refinery Limited (PRL) has reduced the price of furnace oil by Rs 15,000 per ton from Rs 135000 to Rs 120,000 per ton effective November 1, 2022.

Earlier, Pakistan Refinery Limited (PRL) reduced the price of furnace oil by Rs 10,000 per ton to Rs 144,400 per ton.

The current price of furnace oil by NRL and Byco is the same and will sell at Rs 120,000 per ton from November 2022.

The price of Pak Arab Refinery (Parco) is Rs 110,000 after the current revision. It also reduced the price closer to the end of last month.

Earlier, NRL also reduced the price of furnace oil from Rs.154,484 per ton to Rs.144,184/MT.

However, Pak Arab Refinery Limited (Parco) has maintained the price of furnace oil at Rs 155,000 per metric ton.

Sale of Furnace oil in October 2022

The sale of furnace oil has witnessed a sharp decline of 36 per cent during the month under review. The actual sale of furnace oil remained at 194,963 metric tons during October which was down by 36 per cent.

The sales have been at a low level due to less consumption in power plants during the period under review.

LNG has appeared to be a competitive fuel against furnace oil in Pakistan. However the country has been witnessing a shortage of LNG due to the higher demand for products in the global market.

Despite the shortage of LNG, the refineries have witnessed a decline in its sales.

The highest furnace oil prices in Pakistan

Earlier, the price of furnace oil had gone up further to Rs 191988 per metric ton, the highest ever in the history of Pakistan effective from April 16, 2022.

With the fresh increase, the price of LSFO jumped up to Rs 191,988 per metric ton.

The price of HSFO had witnessed an increase to Rs 182, 853 per ton.

Earlier, according to the PSO website, the price of furnace oil in Pakistan had witnessed a massive increase to Rs 161,000 per ton for the first time in history effective from April 1, 2022.

The price of HSFO went up to Rs 153,000 per ton and LSFO Rs 161000 per ton for the first time in history following fluctuation in global oil prices.

The price of LSFO stood at Rs 154000 per ton on March 16.

The price of HSFO was Rs 146,767.1400 on March 16.

Types of Furnace Oil

There are two types of furnace oil in Pakistan that include Low sulphur furnace oil (LSFO) and High Sulphur Furnace Oil (HSFO).

The power plants in Pakistan mainly use furnace oil to produce electricity.

The price of LSFO had witnessed an increase of over Rs 9723 per metric ton from Rs 118,938.8304 per metric ton to Rs Rs 128,661.57 per metric ton effective from February 1, 2022.

In the case of HSFO, the price of furnace oil also went up to Rs 121,636.00 per metric ton from Rs 111,649.5900 per ton with an increase of Rs 9987 per metric ton.

• Low sulphur furnace oil (LSFO) Price effective on February 1, 2022: Rs 128,661.57 per metric ton
• Low sulphur furnace oil (LSFO) Price effective on January 16, 2022:Rs 118,938.8304 per metric ton
• High sulphur furnace oil (HSFO) Price effective on February 1, 2022: Rs 121,636.00 per metric ton
• High sulphur furnace oil (HSFO) Price effective on January 16, 2022: Rs  111,649.5900 per metric ton
• Earlier, Oil refineries in Pakistan had offered discounted prices of furnace oil in January 2022 for power plants to dispose of stocks.

 The Import Parity Price (IPP) of furnace oil for the current fortnight comes to 92,423 Rs/ MT in Pakistan.

Sources said that these refineries had offered Rs 80000 to Rs 86000 per ton furnace oil price for power plants.

Furnace oil turned black gold for refineries

Due to the reluctance of the power sector, the refineries furnace oil stocks had piled up which resulted in partial operations of refineries in Pakistan.

Petroleum division in a letter to power division said that Parco refinery had indicated a price of furnace oil at Rs. 83,000 per MT for Power plants.

Meanwhile, NRL PRL and CNERGYICO have also forwarded their price of furnace oil.

PRL had quoted a price of Rs 81000 per metric ton, NRL Rs 80,000 per ton, and CNERGYICO Rs 86000 per ton.

The petroleum division had requested the Power division to look into the matter for appropriate action with regard to merit order for the supply of FO to the Power Plants.

It said that power plants should lift supplies of furnace oil keeping in view the severe ullage issues local refineries faced especially PARCO.

Pakistan Refinery Limited (PRL) in a letter said that the Minister of Energy, in a meeting on January 6, 2022, discussed the grave issue of huge build-up of furnace oil inventories of local refineries due to its non-utilization in power production.

During the meeting, participants had suggested asking refineries to consider further lowering the furnace oil prices which could make furnace oil-based power plants competitive.

However, it said that lowering the ex-refinery price of furnace oil for a limited period is not the apt solution to this problem, as it does not address the refineries’ sustainability issue.

It argued that giving discounts on furnace oil prices could mean that in the future, furnace oil prices irrespective of the demand. Hence, we are of the view that further lowering of furnace oil prices in such a manner is not beneficial to refineries, it further added.

PRL’s ex-refinery price of furnace oil for the first fortnight of January 2022 is Rs. 86,000 per ton against the Import Parity Price of Rs. 92,434 per ton and the monthly average FOB price of reference crude (Arab Light for December 2021) of approximately Rs. 101,000 per ton.

The above price comparison clearly shows refineries’ loss, and any further reduction in the price of furnace oil will further compound sustainability challenges.

Since the start of 2020, refineries have been working with MoE (PD) on the proposed Refining Policy, which if approved, will comprehensively address refineries’ sustainability challenges and will also support the government’s endeavours of consumption of environment-friendly fuels. 

The draft Refining Policy must be approved without any further loss of time by the concerned authorities.

Because of the above, the suggestion of reducing furnace oil prices in Pakistan is not viable for PRL and other refineries. It requested, that a meeting of all the relevant stakeholders, including the Power Division, be called by MoE (PD) for a comprehensive solution to this issue.