Pakistan State Oil (PSO) resumes fuel oil imports after four-month pause
Islamabad (Reuters) : Pakistan State Oil (PSO) this week issued its first fuel oil import tender for the year after suspending purchases at the end of 2017 ahead of an expected pickup in demand during summer.
In December, Pakistan’s main oil importer PSO, halted imports of fuel oil amid an sudden drop in home demand as the South Asian country focused to liquefied natural gas (LNG) to fuel its power sector.
The state-owned oil company issued a tender notice pleasing bids for the supply of an indefinite amount of high-sulfur and low-sulfur fuel oil for delivery over May 25-June 10 and June 11-June 30. Traders said the tender text was released this week.
The recommencement in PSO’s fuel oil imports is predicted to reinforce the regional market and restrict exports of the fuel from the Middle East, where most of Pakistan’s fuel oil is supplied from, three trading sources said.
Nevyn Nah, oil products analyst at Energy Aspects in Singapore said, “Pakistan’s power generation typically doubles during summer from winter levels and they will need fuel oil-generated power to make up for the increase,” But technical issues at some of Pakistan’s newest gas-fired power plants could also be feeding the country’s renewed appetite for fuel oil.
Nah told that, “Operations at the new LNG power plants are reportedly not smooth and there’s potential delay to the start-up of several new LNG plants.”
PSO did not respond right away to phone calls and emails from Reuters seeking comment.
Before suspending imports, PSO typically tenders for about seven 65,000-tonne cargoes of high-sulfur fuel oil and around two 55,000-tonne cargoes of low-sulfur fuel oil each month.
The drop in Pakistan’s fuel oil demand had also led to a buildup in domestic supplies, prompting PSO to issue a rare export tender for at least two fuel oil cargoes at the start of the year.
On average, PSO imported about 400,000 to 650,000 tonnes of fuel oil a month in 2017. It last issued a fuel oil import tender in late 2017 for January delivery, but later canceled it.