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Pakistan oil companies to import more oil product in July-August

June 30/2020

MOSCOW (MRC) -- Pakistan's oil marketing companies are likely to import more spot barrels of motor fuels soon as the recovery in domestic demand amid low refinery run rates threatens to draw down the country's already limited supplies, traders said, said S&P Global.

This expectation was sparked by concerns of a supply crunch after the country's Oil and Gas Regulatory Authority in mid-June imposed a cumulative fine of around Pakistan rupees 40 million (USD240,000) on six major oil marketing companies for holding insufficient motor fuel inventories, OGRA's official reports revealed.

Shell Pakistan, Total Parco Pakistan Limited, Puma Energy, Gas and Oil Pakistan, Attock Petroleum and Hascol Petroleum were the six slapped with fines, according to the reports. However, they could not be immediately reached for comment on the matter.

Signs of an increased import appetite also emerged from a string of amendments Pakistan State Oil Corporation made to its recent buy tenders, seeking even prompter delivery of gasoline cargoes. In Its 92 RON gasoline buy tender for H1 July, the company revised the original delivery dates of July 1-15 to June 25-July 15, while the dates for its H2 July and H1 August tenders were changed to July 10-31 and August 1-12, from July 16-31 and August 1-15, respectively.

"By pushing the dates earlier, we can see that PSO has a more urgent need for [gasoline] cargoes," one Singapore-based trader said. In addition, the company also issued a fresh spot tender seeking an additional 4,000 mt of 97 RON gasoline for delivery over July 23-28 to Keamari terminal.

PSO typically buys 97 RON gasoline in a combined cargo with 92 RON gasoline, but this time round, has imported it separately due to a sudden spike in driving activity, market sources said.

In addition to raising the cargo sizes of imports to 55,000 mt, from 45,000 mt previously, a source with close knowledge of PSO's import plans said that the company's import requirements will likely be around eight MR-sized cargoes per month, two more than the usual requirement of around six MRs per month.

As MRC informed before, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim.  At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, petrochemistry.
Category:General News
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