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Pakistan State Oil (PSO) has issued a tender to purchase 500,000 tonnes of low sulphur fuel oil for delivery in Karachi, according to local sources.

Pakistan's leading oil marketer is understood to be interested in buying 10 cargoes of 50,000 tonnes for delivery between the months of June and September in order to help cover domestic power shortages in the country.

The tender, which closes this Friday, is reported to be for 170-centistoke fuel oil with 0.95 percent sulphur and 0.92 to 0.96 density.

The volume of the tender is higher than PSO's previous tender for 300,000 tonnes of fuel oil for April to June delivery. Bunker suppliers Bakri International Energy Co. Ltd. and Fal Oil were awarded the tender at premiums of $69 to $90 a tonne to Middle East spot quotes, on a cost-and-freight (C&F) basis.

The higher import volumes into Pakistan will help support Asian fuel oil prices that are currently weighed down by slow demand from China. The fact that fuel oil emanating from the Middle East will go to Pakistan, rather than Singapore, should also help support Asian prices.

The latest PSO tender is still lower than the total amount of fuel oil imported into Pakistan during the same period in 2007. Last year, 750,000 tonnes of fuel oil entered the country between the months of July and September, a period of high power generation demand.

Interestingly, whereas last year only 50,000 tonnes of the imported material was fuel oil with sulphur content lower than 1.0 percent, the product specifications for the current tender would suggest there has been a dramatic change in the fuel oil purchasing requirements for the Pakistani electricity market.