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ISLAMABAD: Pakistan State Oil (PSO) has scrapped tenders for delivery of High Sulphur Furnace Oil (HSFO) cargoes for September 1-15, 2022 due to low upliftment by the power plants, well informed sources told Business Recorder.

As per the daily stock receipts compiled by NTDC, the upliftment till August 16, 2022 has been extremely low (approx. 72.5000 tons) while the consumption has been much higher (approx. 12l, 000 tons) which implies that the power plants are consuming their own stocks while the upliftment has not been according to demand of over 432,000 tons which was conveyed by Power Division for the month of August, 2022 and communicated on April 26, 2022.

The sources said, the trend of substantially low upliftment by the power plants continues since June and July, 2022 against the demand placed by Power Division. PSO has; therefore, been facing delays in offloading furnace oil cargoes due to ullage constraints.

In the meetings held on July 29,2022 and August 1, 2022 to discuss fuel position, PSO was directed to cancel two HSFO cargoes awarded for delivery in first fortnight of August, 2022. However, the import contractor did not allow unilateral cancellation of these cargoes and supplier was not ready to accept it. After efforts, PSO managed to get delivery of one of the cargoes till end August, 2022 and the second cargo till mid September, 2022.

FY22: PSO’s profit skyrockets to Rs95.7bn, up 223% driven by strong sales

According to sources, in view of high stocks and the cargoes in-hand along with the local refineries availability and substantially reduced demand for August and September, 2022, PSO has scrapped the tenders opened for delivery of HSFO cargoes for September 1-15, 2022. Tenders for HSFO cargoes for second fortnight of September, 2022 were to be opened on August 23, 2022 but no firm demand for September and October, 2022 has yet been communicated by Power Division despite request of August 3, 2022. PSO is; therefore, unable to take a decision regarding award of cargoes.

Directorate General of Oil (Petroleum Division) has requested Power Division to advise the power plants to increase the upliftment as per the demand placed for the month of August, 2022 and also initiate the demand for September - December 2022 so that PSO and other OMCs can plan well within time for import procurement.

Meanwhile, National Power Control Centre (NPCC) has conveyed to Petroleum Division that RLNG of 396 MMCFD has been allocated for October 2022 against demand of 750 MMCFD.

For October, total requirement of furnace oil for 11 power plants is 273263 MT of which HSFO demand is 237729 MTs whereas LSFO demand is 35534 MTs.

According to NPCC, two hour load management is considered as per direction of MoE (Power Division ). NPCC argued that generation shortfall will further increase in case of non-supply of fuel and any other unforeseen event. “These are tentative average figures. Variation in consumption may be observed, as actual system dispatch will depend on plant availability, system demand, Economic Merit Order (EMO) and availability of network,” said Sajjad Akhtar GM NPCC in a letter to Petroleum Division and its attached Organizations.

He further stated that apart from the operational requirement fuel-oil at various power plants, the fuel oil stock consumed must be replenished by consistent/ cyclic building-up of oil stock at all oil-based power plants in accordance with their relevant PPA, so that system requirement could be met and any power shortfall due to fuel shortage could be avoided.

GM NPCC has also urged CPPA-G that necessary payments to power plants must be ensured for timely procurement of fuel to avoid shortage of fuel constraint and load management.

He maintained that any additional RLNG made available to power sector will be utilized according to the prevailing ECO as and when allocated. However, variations in RLNG supply to power sector from already committed supply will cause variation in consumption of FRO/ HSD.

Copyright Business Recorder, 2022

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