General Characteristics

* Heavy ends of crude distillation includes Furnace oil, Low sulphur Heavy Stock (LSHS), Residual Fuel Oil (RFO), Lube oils, Bitumen, Petroleum coke, Paraffin wax, other waxes etc.
* Used as an industrial fuel, Furnace Oil (FO) is a dark viscous residual fuel obtained by blending mainly heavier components from crude distillation unit, short residue and clarified oil from fluidized catalytic cracker unit.
* Internationally Furnace Oil is known as Fuel Oil and is traded in many varieties based on its specifications of viscosity and sulphur percentage. The most common varieties are 180 cst & 380 cst with 2.0% and 3.5% sulphur.
* The latest estimation of world’s furnace oil production (residue/distillate) in 2004/05 is about 2500 million Metric Tons

Factors Influencing Demand & Supply of Fuel Oil Prices

* Crude oil demand supply scenario
* Weather conditions
* Seasons
* Business cycles determining manufacturing centre
* Global demand particularly from emerging nations
* Dollar fluctuations
* Stocks
* Oil marketing companies’ fortnightly price announcements

Indian Scenario

* India’s Furnace Oil production in 2003-04 is estimated at around 8.74 million metric tons
* Consumption during the period 2002-03 is 8.03 million tons while imports were about 1.26 million tons valuing Rs. 1084 crores during same period
* The Public sector refiners produce major share of furnace oil consumption requirements in India. The imports of furnace oil accounts for about 5-10% of total consumption.

Consumer-wise Indian Consumption of Furnace Oil (2002-03)
Having being used across a plethora of industries, it is a very important commodity and the pricing, unlike some other petroleum products, is not administered by the government and is a freely priced commodity. Some indicative consumption pattern follows: