Pakistan State Oil cancels jet fuel tender

The company had been seeking 25,000 tons for delivery in January.

SINGAPORE: Pakistan State Oil (PSO) has cancelled a tender to purchase jet fuel in January after the government closed supply routes to Nato troops in Afghanistan, two sources with direct knowledge of the matter said on Tuesday. The supply route was closed in protest against a cross-border raid.

The company was seeking 25,000 tons of jet A-1 fuel for delivery in January through a spot tender that closed on December 5 and was valid until December 10. This has now been cancelled after the November 26 Nato air attack that killed 24 Pakistani soldiers, one of the sources said.

Pakistan imports about 25,000 tons of jet fuel every month and about 90% of this transported to Afghanistan, the source said. “The jet fuel situation in Afghanistan is very tight now, talks on jet fuel supply are still ongoing and is expected to take a few weeks,” the source said.

Shell in Pakistan and a few other marketing companies also supply jet fuel to Afghanistan, but total volumes exported to the country are not known, the source said.

For the jet fuel tender which was scrapped, Oman Trading International was understood to have the lowest bid of $4.16 a barrel above Middle East quotes on a delivered basis, while Sahara Energy had the highest bid premium of $5.47 a barrel, a third industry source said.

PSO last bought two 50,000 ton cargoes of jet fuel for November-December delivery from Vitol at a premium of $4.04 a barrel CIF to Middle East quotes. It also bought an optional cargo for delivery over the same period from Vitol at a premium of $5.25 a barrel CIF to Middle East quotes.

Published in The Express Tribune, December 14^th, 2011.