KARACHI: The import of furnace oil, which used to be a primary fuel for power generation, has plunged 90% in the last four months, following a massive increase in Pakistan’s reliance on imported liquefied natural gas (LNG) and coal-fired electricity plants recently.
Furnace oil imports dropped to 214,000 tons in the first four months (July-October) of the current fiscal year 2019, compared with 2.15 million tons in the same period last year, according to the import data compiled by Arif Habib Limited Research.
“The major drop in furnace oil imports is seen after Pakistan gradually shifted power generation to coal and liquefied natural gas (LNG) from furnace oil,” brokerage house Head of Research Samiullah Tariq said in comments to The Express Tribune.
The previous federal government set up four to five mega power projects on coal and LNG, which cumulatively added over 5,000 megawatts (MW) in the system.
At the same time, it pulled the plug on a number of plants of furnace oil and diesel of installed capacity of around 4,000MW.
According to the Pakistan Bureau of Statistic (PBS), LNG imports surged 136% to $939.2 million in the first three months (July-September), compared with $397.4 million in the same period of last year.
Besides, the import of diesel also dropped notably by 32% to 853,000 tons in the four months compared with 1.25 million ton in the corresponding period of last year.
“According to findings of a lubricant marketing firm, a number of mobile phone towers have been shifted to national power grids from home-based diesel generators. This development gave an additional hit to diesel import,” the analyst said.
The import of petrol decreased 3.4% to 1.78 million tons, while the imports of crude decreased 9% to 3.33 million tons in the four months. Cumulative import of crude and the refined oil produced declined 32% to 6.27 million tons in the four months compared to 9.08 million tons in the corresponding period of previous year.
Oil sales fall
Accordingly, the sale of petroleum refined products at retail level also saw a cumulative drop of 32% to 6.41 million tons; backed by a massive drop of 72% to 1.1 million tons in furnace oil in the four months.
The sale of diesel dropped 14% to 2.55 million tons, whereas the sale of petrol remained unchanged at 2.52 million tons. The increase in petroleum product prices in recent months is told to be one of the causes of no growth in petrol and slowdown in diesel.
Published in The Express Tribune, November 6th, 2018.