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Fuel oil imports into Pakistan rose from three-year low volumes in April to approximately 700,000 tonnes last month, according to data released by the Oil Companies Advisory Committee.

Imports of high sulphur fuel oil (HSFO) - a product mainly used by local utilities for power generation - reached their highest level since October 2010 at around 600,000 tonnes. Inflows of low sulphur fuel oil (LSFO) were about 116,000 tonnes, official data showed.

The average monthly import figure for the year so far is now at around 558,000 tonnes - slightly above last year's average for the first five months of 550,000 tonnes.

The low volumes recorded in April were not considered to be reflective of the country's growing demand for fuel oil, which is expected to increase this year, and were due to operational issues, local sources said.

Pakistan is one of the few growth areas for the fuel oil market in the world as its electricity is still generated by oil-fired plants, while other countries have turned towards other power generation solutions due to environmental concerns.

National oil marketer Pakistan State Oil (PSO) is a regular buyer of fuel oil from the Middle East, purchasing between 500,000 to 600,000 tonnes a month of 120-180 centistoke (cst) fuel oil for power generation. The majority of the country's supplies come from the Middle East due to the freight advantage because of the proximity of the region to Pakistan, versus East Asian players.

Pakistan has traditionally been a stronghold for Middle East fuel oil players such as Bakri and FAL Oil, however European traders Vitol and Trafigura have also muscled into the Pakistan market over the past 12 months since establishing operations in the United Arab Emirates.

PSO has issued a tender to purchase up to 1.66 million tonnes of fuel oil between August and October. The company is seeking 20 HSFO parcels of 65,000 tonnes each and six LSFO cargoes of 60,000 tonnes each for delivery during this three month period on a cost-and-freight (C&F) Karachi basis.

The tender, which averages at 553,000 tonnes per month, closes on June 28th and will remain valid until July 2nd.