Pakistan’s 100,000 barrel-per-day (bpd) Pak Arab Refinery Ltd (PARCO) has been shut by the severe floods and the country will need to import jet fuel and gasoline to plug the supply gap, traders said on Tuesday.
Pakistan State Oil (PSO) is seen buying two jet fuel cargoes totalling 35,000 tonnes, and up to three parcels of gasoline totalling 105,000 tonnes for September delivery.
It has sufficient gas oil inventories, trading sources said. PARCO, 60 percent owned by the Pakistan government and the remainder held by the Emirate of Abu Dhabi through its Abu Dhabi Petroleum Investment Company (ADPI), is expected to resume full production by mid-September.
“Due to the refinery shutdown, the country is deficient in jet fuel and mogas, so it has to fill the gap through imports. But there are enough supplies of gas oil, so PSO is reducing import volumes for August and September,” said a trading source.
PSO is cutting its gas oil imports from Kuwait Petroleum Corp (KPC) by 100,000 tonnes a month in August and September. Its average import volume from KPC is 300,000 tonnes a month.
“We believe import volumes for PSO will go back to normal by October. The flood situation should improve by then,” said the trading source.
Due to the floods, PSO has declared force majeure on two cargoes — one was a low-sulphur fuel oil cargo and the other a gas oil cargo, both for August delivery, traders said.