Pakistan National Refinery Limited (NRL) has started producing very low sulphur fuel oil (VLSFO) for ships and is planning to expand its monthly output by at least five-fold in six months, the company said late Tuesday.

The company is producing about 2,000 metric tons of VLSFO per month, with the monthly volume likely to increase to 10,000 tons to 12,000 tons over the next six months, NRL told Reuters in an email.

NRL announced the production of VLSFO in a notice to the Pakistan Stock Exchange earlier this week, stating that this comes after a "necessary change in crude mix and adjustments in production process".

In Pakistan, VLSFO is typically produced via blending of the high-sulphur fuel oil (HSFO) with other fuels, industry sources said.

NRL said it will supply VLSFO to ships calling at Pakistan.

"HSFO market is shrinking in Pakistan and the refinery faces problems in selling it locally, whereas bunker fuel market segment is starved," the company said. (Reporting by Ariba Shahid in Karachi; Additional reporting and writing by Jeslyn Lerh in Singapore; Editing by Florence Tan and Sohini Goswami)