Only one supplier has responded to the Pakistan State Oil (PSO) tender for the supply of 54,000 metric tons (MT) of gasoline during the last week of July as the issue of letters of credit (LCs) further worsens. The issues are overall dollar’s low availability and higher energy prices globally.
Due to letters of credit (LC) issues, only one supplier participated in PSO Mogas Tender for the delivery of 54,000MT of gasoline from 29 to 31 July 2022, this information is taken from daily The Nation.
PSO had floated tenders for the supply of 50,000 MT Petrol 92 RON and 4,000 MT Petrol 95 RON on 29 and 31 July, but only one company, Idemitsu, has responded and offered $20.688/barrel for 92 RON and has given a quotation of $23.888/barrel for 95 RON.
On the other hand, two other supplies, ADNOC and BB Energy regretted participating in the process tender, the source said.
Foreign banks are not confirming local refineries or oil marketing companies (OMC) letters of credit for the imports of crude oil and import of petroleum products. Pakistani banks were opening LCs on behalf of the Refineries/OMCs, but their partner banks were not extending credit cover, which is hurting the import of crude oil and petroleum products.
The source remarked, “they simply don’t trust you that’s why the foreign companies are reluctant to reply to Pakistan’s refineries and OMCs tenders.”
Earlier this week, two cargos carrying petroleum products from PSO had refused to offload due to the non-confirmation of LCs by the international banks.
Refineries and OMCs have conveyed the issue to the Petroleum Division several times, but no progress has been achieved on the issue, the source said.
The supplier wants cash and is not ready to accept unconfirmed LCs, the source added. This uncertainty and mistrust must end as it will push the country into a new fuel shortage crisis.
