SINGAPORE (Reuters) - Pakistan State Oil (PSO) has delayed a few fuel oil and gas oil cargoes for August delivery due to the countrys floods, with some traders saying PSO had declared force majeure on two term diesel parcels from Kuwait Petroleum Corp (KPC). PSO is planning to defer a few high-sulphur term gas oil cargoes for delivery in August and maybe early September, said an industry source familiar with the matter. Transport lines in the country have been disrupted due to the floods, and PSO has ample inventories because the flood has reduced domestic fuel consumption, he added. PSO takes delivery of at least two 0.5 percent sulphur gas oil cargoes measuring between 30,000 and 50,000 tonnes from KPC every month. Pakistan has declared force majeure on at least two gas oil cargoes due to the floods, added another trading source. Traders said KPC had sold the deferred gas oil cargoes in the Middle East spot market over the last two weeks. KPC could also stockpile the oil ahead of the Muslim festive season next month. We heard KPC sold some cargoes because of the shipments that were force majeured by Pakistan, so high-sulphur gas oil premiums in the Mid-East Gulf have collapsed, said one trader. Premiums for 0.2pc and 0.5 percent sulphur gas oil have fallen below $1.50 a barrel to Middle East spot quotes this week, compared with $2.00-$2.50 a barrel last week, traders said. KPC sold a spot gas oil cargo for Aug . 23-24 loading to Glencore at a premium of $1.10 a barrel to Middle East spot quotes earlier this week, after selling a similar parcel to Trafigura at a premium of $2.05 a barrel last week, traders said. About one-third of Pakistan has been hit by three weeks of devastating floods due to torrential monsoon rains, with waters stretching tens of miles from rivers. Apart from homes, the floods have swept away roads, bridges and telecommunications as well as reducing domestic fuel demand. FUEL OIL DEFERRED TOO Pakistan has also deferred two low-sulphur fuel oil (LSFO) cargoes for delivery in August, and may delay one or two high-sulphur fuel oil (HSFO) parcels, the industry source added. Pakistan doesnt need so much fuel oil right now as the power plants are running at low capacity because of the floods. On Friday, gas oils prompt September crack edged up 9 cents to a premium of $11.63 a barrel to Dubai crude in early trade, strengthening for the second straight session. Sentiment was lifted after Singapore trader Hin Leong extended its bull trading play, having snapped up of 3.5 million barrels of 0.5 percent sulphur and 10ppm sulphur gas oil for delivery between August 18 and September 16 during the trading window to-date. But the markets broader fundamentals remain weak, as heavy supplies from Japan and South Korea weighed on the market. India, a large importer of low-sulphur gas oil from Asia, has also been absent from the market due to lower consumption during the monsoon season. Fuel oils prompt September crack narrowed 18 cents to a discount of $4.91 a barrel to Dubai crude on Friday, while the Oct crack gained 17 cents to a discount of 5.03 a barrel. Reflecting heavy supplies in the market, fuel oil stocks in Singapore tanks surged to a six-week high last week. The bulk of Western arbitrage cargoes for August are scheduled for arrival between the second-half of the month and the first half of September.