PSO buys more fuel to meet demand

SINGAPORE: Pakistan State Oil (PSO) will buy another 60,000 tonnes of diesel from the spot market to meet rising summer demand and to plug a supply gap as a recent strike in Kuwait had affected supplies coming from the Middle East, traders said on Thursday.

With the additional 60,000 tonnes, PSO’s total purchase of diesel with 0.5 per cent sulphur content for May arrival in Karachi now stood at 215,000 tonnes, an unusually high spot volume for a single month.

This could not be directly confirmed as buyers and sellers do not comment on their deals and operations.

A strike by oil and gas workers in Kuwait last month has resulted in PSO’s long-time term supplier Kuwait Petroleum Corp (KPC) needing to scale back at least one cargo.

The new 60,000-tonne spot cargo for May 25-31 arrival in Karachi will be supplied by Gulf Petrochem at a premium of $2.82 a barrel to Middle East quotes on a cost-and-freight (C&F) basis.

Gulf Petrochem beat Trafigura and Vitol for the supply of the cargo with the lowest offer compared to the over $3 a barrel premium from the two European trading houses.

The previous 155,000 tonnes of diesel PSO had bought for May delivery were close to $3 to $4 a barrel premium but the sellers’ identities were not immediately clear.