PSO attracts bids for two petrol cargoes amid Strait of Hormuz tensions

• Bids valid until Mar 13; PSO must respond before the deadline expires.
• Agricultural machinery expected to increase fuel consumption.
• Diesel stocks sufficient for 20 days, demand to rise with harvest season.

Amid tensions in the Strait of Hormuz, Pakistan State Oil (PSO) has received bids from international traders for two petrol cargoes, each weighing 55,000 metric tons with a 92 RON rating, as the country works to secure supplies amid fluctuating global fuel prices.

Sources indicate that for the first cargo, OQ Trading submitted the lowest bid with a Cost and Freight (CFR) premium of $17.8 per barrel. Be Energy SA offered a CFR premium of $22 per barrel, while Vitol Bahrain E.C. quoted the highest premium at $39 per barrel, The News reported.

For the second cargo of the same quantity, only two bidders participated. Once again, OQ Trading emerged as the lowest bidder, offering a CFR premium of $19.5 per barrel, while Be Energy SA submitted a bid of $23.5 per barrel. Officials noted that the lowest bids for both cargoes are still considered relatively high.

Officials said the bids were received under the rules of the Public Procurement Regulatory Authority (PPRA), which governs public sector procurement in Pakistan. However, authorities noted that the strict tendering procedures sometimes contribute to higher procurement costs, particularly during periods of volatility in international energy markets.

The bids will remain valid until March 13, meaning the PSO must respond to the bidders and finalise its decision before the deadline expires.

Sources also revealed that the PSO failed to receive any bids for a high-speed diesel cargo, as the traders quoted a CFR premium of around $80 per barrel, which was deemed excessively high. Due to daily fluctuations in international petroleum prices, the suppliers were reluctant to offer competitive bids within the validity period.

Meanwhile, Total Parco Pakistan Limited, an oil marketing company, has arranged a cargo of Euro-II specification diesel at a premium of $20 per barrel and is seeking government approval for the import. The PSO, however, typically imports Euro-V specification diesel, which meets stricter environmental standards.

Officials said Pakistan’s diesel stocks are currently sufficient for about 20 days, but the demand is expected to increase next month with the start of the harvesting season, when agricultural machinery significantly raises fuel consumption.

Given the anticipated surge in demand from the agriculture sector, authorities stressed that arranging diesel supplies at affordable prices will be crucial to ensure uninterrupted farming operations and maintain stability in the domestic fuel market.