Pakistan awards fuel oil import contracts
Pakistan State Oil (PSO) has awarded import contracts for a total of 240,000 tonnes of fuel oil to two companies. Bakri Bunker of Saudi Arabia and Petronas of Malaysia have jointly won the tender PSO floated July 14. Eight companies participated in the bid. These deliveries will be the first after deregulation
KARACHI�Pakistan State Oil (PSO) has awarded import contracts for a total of 240,000 tonnes of fuel oil to two companies. Bakri Bunker of Saudi Arabia and Petronas of Malaysia have jointly won the tender PSO floated July 14. Eight companies participated in the bid. These deliveries will be the first after deregulation.
Previously, fuel oil was imported by the government through the Ministry of Petroleum and Natural Resources, mostly through term contracts with Saudi Arabia and Kuwait.
PSO contracted for four cargoes of 60,000 tonnes each to be delivered at the Fauji oil terminal at Port Qasim. The first delivery is scheduled to be made available August 6-8, the second August 17-19, the third August 23-25, and the fourth August. 29-31.
Bakri and Petronas have quoted $13-15/tonne over and above the benchmark price of furnace oil. The rate includes freight and premium, they said. Bakri may deliver the first two cargoes, while Petronas the other two.
PSO has the largest oil handling, storage, and distribution network, which gives the state-run company an edge over two other oil marketing companies, Shell and Caltex. Those companies may take their time to take advantage of fuel oil deregulation.
The purchases during the last fiscal year were done on deferred payments. Out of 8.2 million tonnes of fuel oil required domestically, 6.4 million tonnes were imported last year. The local refineries provide the balance of 1.8 million tonnes.
The cost of petroleum imports during fiscal year 1999-2000 recorded a big jump of 88.55% to $2.762 billion from $1.464 billion last year. The main reason for this hike was the threefold increase in the price of crude oil in the international markets, which rose by about $9/bbl to $31/bbl by the end of the 1999-2000 fiscal year.
The government aimed to collect 58 billion rupees as development surcharge from oil imports, but after the increase in international oil prices the sum slipped to 39 billion rupees.