Eid holidays may disturb oil supplies: Power plants: furnace oil arranged for May

ISLAMABAD: The Petroleum Division has arranged 281,000 MMT furnace oil for May 2022 for the power sector to be supplied till May 24, 2022, fearing that supplies can be disputed during the first week of May due to the Eid holidays.

On April 23, 2022, Power Division sent the revised plant-wise demand for furnace oil for the month of April, and May 2022.

According to the Directorate General of Oil (Petroleum Division), the matter was consulted with PSO, APL and BE, being the major suppliers of RFO to the power sector. In view of their stock availability, expected supplies from local refineries, and import procurements, they furnished maximum supply commitments of 281,000 tons during the month of May 2022.

The weekly supply commitments are based on the following observations: (i) tentative supplies plan is subject to timely supplies from refineries, berthing of cargoes and timely payments from respective IPPs.

Any deviation from this will affect supplies to customers; (ii) supplies in the 1st week of May 2022 may get disturbed due to Eid Holidays.

Customer receipt may vary from daily supply plan due to transit time;(iii) shortfall in Low Sulphar Furnace Oil(LSFO) demand for KAPCO (38,000 MT) will be arranged on best endeavor basis if 2nd LSFO cargo is berthed in time;(iv) shortfall in HSFO demand for Liberty Tech (10,000 MT) can be supplied by BE if the order is placed by the power plant; and (v) demand placed for M/s Attockgen has not been included, which will be supplied by APL to the full extent.

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Power Division has been requested to finalize its generation plan for the month of May 2022, as per oil furnace oil commitments, and confirm it.

Weekly RFO supply plan for May, 2022 is as follows: (i) Hubco Narowal demand is 20,000 MMT of furnace oil;(ii) Nishat Chunian power 18,094 MMT;(iii) Nishat Power 16,915 MMT;(iv) Atlas Power Limited 13,791 MMT; (v) Liberty Tech, 19,612 MMT;(vi) Lalpir/ Pakgen 51m017 MMT;(vii) Saba 9,722 MMT; and (viii) KEL 13,580 MMT, Hubco 38,464 MMT and Kapco (LSFO) 102,975 MMT.

The tentative supplies plan is subject to timely supplies from refineries, berthing of cargoes and timely payments from respective IPPs. Any deviation from this will affect supplies to customers.

According to sources, customer receipt may vary from daily supply plan due to transit time. The shortfall in LSFO demand for Kapco will be arranged on a best endeavor basis if the 2nd LSFO cargo is berthed in time. The shortfall in HSFO demand for Liberty Tech (10,000 MT) can be supplied by BE if the order is placed by the power plant. The demand placed for Attockgen has not been included which will be supplied by APL to the full extent.

The sources said, 375,000 MMT furnace oil has been imported. Some of the ships are expected to berth in May.

For the month of May 2022, eight cargoes of 435,000 MMT of HSFO are expected to berth from May 1 to May 24.

Power Division has been requested to share the demand for June 2022 so that procurement is timely planned.

Copyright Business Recorder, 2022