Islamabad December 26 2021: In order to sort drop in refineries run rate due to higher furnace oil inventories a new refinery policy is being finalised to shift refineries away from production of FO, says Hammad Azhar.
He says “In summers Pakistan faced a moderate shortage of Furnace oil as FO power plants ran more than last year (as per merit order) due to low water levels in dams. FO consumption was 116% higher.”
He added, “For winters, 200k tonnes has been imported due to: a) higher demand projection b) risks of further LNG cargoes default c) low stock levels at IPPs. Fortunately no further defaults of LNG cargoes took place in nov-dec period therefore FO plants did not need to run.”
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Now the FO plants are running because of lowering flows from dams (canals closure) and in a couple of days will be consuming 13,000 tonnes/day of FO. Local refineries produce only half that volume and IPPs stocks levels are still below the required levels.
Therefore the country is well stocked on FO in case of further LNG defaults. The surplus at some refineries is going to IPPs as FO consumption is already above 6000 tonnes/day.