Power plants begin burning more FO to tackle loadshedding

Tanveer Malik
Wednesday, Jul 06, 2022

KARACHI: Country’s power plants are burning more furnace oil to generate electricity with daily fuel oil consumption surging to 19,000-20,000 tonnes, The News learnt on Tuesday.

According to the oil industry, the sale of fuel oil was on the higher side for the last many weeks after the country experienced loadshedding and government opted to use it for power generation in view of gas shortage on account of high cost in the international market.

“The daily demand of FO is around 19,000-20,000 tonnes per day, which is being met through local production and import,” a top executive of an oil sector firm stated.

Pakistan’s refineries are producing 7,000 tonnes of FO every day for daily consumption, while 12,000 tonnes of the commodity was being imported to meet the remaining demand.

For now, the country has around 300,000 tonnes of FO stocks.

Of these, 90,000 tonnes are with Pakistan State Oil (PSO), 120,000 tonnes with Independent Power Producers (IPPs), 73,000 tonnes with the local refineries and a few thousand tonnes with other companies.

The oil firm official said that apart from 7,000 tonnes of daily production of fuel oil at local refineries, two PSO cargoes were due to arrive soon for local needs.

He said that high consumption of FO for power production has changed the situation entirely in recent months, as FO sales were almost zero in December of last year and January of this year. Lack of uptake increased the FO stockpiles in the country, but some still had to be imported to keep the operations of local refineries running.

However, expensive imported LNG brought down power generation from this source to a lower level, pushing the country towards a shortage of gas and leaving the government grappling with long loadshedding house after coming to power.

The consumption of FO increased when the sale of petrol and diesel dropped in the month of June after government jacked up the prices of products massively, which compelled the consumers to cut down their petrol consumption.

According to figures of Oil Companies Advisory Council (OCAC), the sale of FO posted 33 percent growth in the month of June compared to the same month of last year and for the entire previous financial year, the sale of FO jumped by 35 percent.

The sale of local oil marketing companies (OMCs) have also been on the higher side as they recorded gains in FO sales compared to other products in the month of June.