Pakistan Becomes a Major Heavy Fuel Oil Exporter as Local Demand Collapses

Pakistan’s heavy fuel oil exports reached an all-time high in 2025 and are expected to remain strong or rise further in 2026, driven by higher domestic taxes on the fuel oil that reduced local purchases and power plants shifting to cleaner alternatives, Reuters reported.

What is Fuel Oil?

Fuel oil (FO) or Heavy Fuel Oil is the thick, heavy black liquid left at the bottom after refineries turn crude oil into petrol, diesel, and other lighter products, mostly used in ships and power plants.

The surge has increased supply to an already well-supplied Asian market, further pressuring prices.

Kpler data showed exports exceeding 1.4 million metric tons (8.9 million barrels) so far this year, up over 16% from 2024. LSEG reported 1.33 million tons year-to-date versus 1.11 million tons last year, see the graph, published by Reuters today:

Most volumes are high-sulphur fuel oil (HSFO) heading to Southeast Asia and the Middle East for bunkering or refinery feedstock.

Heavy taxes on local sales and power plants switching to coal and solar have pushed refineries to export the surplus fuel oil instead. Leading exporters include Pak-Arab Refinery followed by Cnergyico, Attock Refinery, Pakistan Refinery, and National Refinery. 

“The trend in furnace oil exports is only going to increase going forward in 2026,” said Syed Nazir Abbas Zaidi, secretary general of Pakistan’s Oil Companies Advisory Council.

As a matter of fact, before 2023, Pakistan was a net importer of fuel oil, and after that, it got upside down, and Pakistan became a net exporter of fuel oil.