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Pakistan State Oil (PSO) has issued a tender to purchase eight cargoes of high sulphur fuel oil, Reuters reports.

Pakistan's leading oil marketer typically purchases 500,000-600,000 tonnes of fuel oil per month of 120-180 centistoke (cst) fuel oil. 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

The company typically buys from fuel oil players such as Bakri, Vitol, Trafigura and Glencore. Up until the end of last year, PSO had also been a regular purchaser of fuel oil from Sharjah-based FAL Oil, until the UAE firm was blacklisted by PSO after failing to meet its contractual agreements. Since then, FAL Oil has also been blacklisted by the United States due to its alleged links with Iran.

The fuel oil purchased by PSO is mainly used for power generation. Demand usually peaks during the summer, when less hydropower output means Pakistan has to turn to fuel oil-powered plants.

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.

PSO also acts as an intermediary for the supply of bunker fuel to the country's national shipping company Pakistan National Shipping Corporation (PNSC) as well as to Pakistan's navy.

PSO recently purchased more than 500,000 tonnes of fuel oil and gasoline for July-September arrival.

The latest tender closed on July 24 and bids are valid until July 31.