Pakistan cuts oil product requirements for May-July
Sunday, 20 May 2012 | 00:00
Pakistan State Oil has cut its total oil product requirements for May to July by 20 percent, after dropping plans to buy a jet fuel cargo and three low sulphur fuel oil cargoes, industry sources said.
The company was seeking 1.17 million tonnes of oil products, including 910,000 tonnes of fuel oil, 210,000 tonnes of gasoline and 50,000 tonnes of jet fuel, for delivery over May to July through a tender.
It ended up buying only half of the jet fuel requirements from Total for delivery in June, skipping its purchase for May, one of the sources familiar with the matter said.
"The cargo was sought in anticipation of the supply lines into Afghanistan being re-opened, but since it still hasn't, the company does not need the cargo," the source said.
Pakistan imports about 25,000 tonnes of jet fuel every month and about 90 percent of this is sold into Afghanistan.
Pakistan closed down the supply lines for the Afghan war effort following the NATO air strike in November that killed 24 Pakistani soldiers. That strike fanned national anger over everything from covert CIA drone strikes to the U.S. incursion into Pakistani territory last year to kill al Qaeda leader Osama bin Laden.
Pakistan and the United States appeared on the verge of clinching an agreement to reopen ground supply lines into Afghanistan, a U.S. official said, as Islamabad confirmed its president will attend a summit of NATO leaders this weekend in Chicago.
Reopening the supply route would be a major breakthrough in ties between Washington and Islamabad. Strained relations have fuelled speculation Pakistan might be excluded from NATO talks on Afghanistan's future.
Once the supply route reopens, PSO will need to import about one jet fuel cargo a month or three cargoes in two months, the source said.
In the same tender, PSO only bought one out of four low sulphur fuel oil cargoes sought from Gunvor, due to a lower than expected demand from power plants, an industry source said.
Separately, the company is expected to enter the spot market soon to seek about 1-2 high sulphur gasoil cargoes ahead of the seasonal peak demand period, the source added.
Pakistan has a term contract with Kuwait Petroleum Corp (KPC) to receive regular shipments of gasoil, and only enters the spot market during the summer period when agricultural activities pick up.
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