Pakistan to pay rising cost for gasoline imports

By Reuters

Pakistan State Oil (PSO) is set to buy a total of 350,000 tons of gasoline for February to March delivery at $87/ton to $89/ton above Middle East naphtha quotes on a cost-and-freight (C&F) basis, industry sources familiar with the matter said this week.

The offers for the 87-octane grade gasoline were at least 24% higher than PSO paid for a total of 450,000 tons of gasoline for December to January delivery.

The sources added the lower volumes of six cargoes at 50,000 tons each versus the previous nine cargoes could have resulted in the higher premiums, although this could not be confirmed independently.

PSO has received the lowest offers from Gunvor, Total and PetroChina among more than 10 firms that took part in its tender which closed on Jan. 22.

The tender will be awarded on Feb. 1.

Due to limited refining capacity, Pakistan is heavily dependent on imports and buys about 22 million tons of oil products a year, of which 3 million is gasoline.

The gasoline crack has outperformed all other oil products recently because of strong global demand, making this a key reason behind high refinery runs.

Asia's gasoline crack, the premium of refining a barrel of Brent crude into the motor fuel, was at $15.71/bbl on Monday, more than three times the value a year ago.