Pakistan State Oil (PSO) purchased a record 1.54 million tonnes of fuel oil to fill a power supply gap from the country’s hydroelectric plants induced by scarce rains, traders said on Monday.
The state-owned company purchased 24 cargoes consisting of four cargoes totalling 240,000 tonnes of low-sulphur fuel oil (LSFO) and twenty 65,000-tonne cargoes totalling 1.3m tonnes of high-sulphur fuel oil (HSFO) for delivery between late May and August, two tender documents showed.
Saudi Arabian oil trader Bakri was awarded nine of the HSFO tenders, followed the United Arab Emirate-based Gulf Petrochem and Singaporean trader Swiss Singapore with five cargoes each and BB Energy which took one, industry sources said.
All of the HSFO cargoes were done on a free-on-board (FOB) basis and settled at a premium range of about $14 to $20 a tonne above Mean of Platts Arabian Gulf (MOPAG) 180-centistoke fuel oil price.
Swiss Singapore and the multinational PetroChina were winners of the LSFO cargoes with two each, sources said.
The LSFO tenders were priced on a cost and freight (C&F) basis and executed at premiums ranging between $50 and $60 a tonne above the MOPAG price.
In February, PSO issued a tender seeking to purchase up to 895,000 tonnes of fuel oil for delivery between April and May in which global traders PetroChina, Glencore and Vitol were among the winners.
In 2015, Pakistan imported a total of 5.9m tonnes of fuel oil and 6.4m tonnes in 2014, data from Thomson Reuters Oil Research and Forecasts showed. In 2016, Pakistan’s fuel oil imports totalled 1.6m tonnes by March, the data shows.
The Islamic Republic is a frequent importer of oil products as it lacks sufficient refining capacity to meet domestic demand.