PSO’s suppliers reluctant in placing tenders due to LCs’ issue

ISLAMABAD    –   Only one supplier has responded to the Pakistan State Oil tender for the supply of 54000 metric ton (MT) of gasoline during the last week of July as the issue of letters of credit (LCs) further worsens.

Due to LC issues, only one supplier participated in PSO Mogas tender for the delivery of 54000MT of gasoline during 29th to 31st July, 2022, official source told The Nation here.

Pakistan State Oil(PSO) had floated tenders for the supply of 50000MT Petrol 92 RON and 4000MT petrol 95 RON during 29th and 31st July 2022. However only one company Idemitsu responded  to the offer and offered $20.688/barrel for 92 RON while for 95 RON it has gave a quotation of $23.888/barrel. Two other supplies ADNOC and BB Energy regretted to participate in the process tender, the source said.

It is worth to mention here that the foreign banks are not   confirming local refineries or oil marketing companies (OMCs) letters of credit (LCs) for the imports of crude oil and import of petroleum products. Pakistani banks were opening LCs on behalf of the refineries/OMCs, but their partner banks were not extending credit cover which is hurting the import of crude oil and petroleum products.

“They simply don’t trust you, that’s why the foreign companies are reluctant to reply to Pakistan’s refineries and OMCs tenders,” the source said. Earlier this week two cargos carrying petroleum products of Pakistan State Oil had refused to offload   due to non-confirmation of LCs by the international banks.

The refineries and OMCs have raised the issue several times with the Petroleum Division but no progress has achieved on the issue, the source said. The supplier wants cash, and are not ready to accept unconfirmed LCs, the source added. This uncertainty and mistrust must end as it will plunge the country into a new fuel shortage crisis.

This scribe has contacted PSO for comments but no response was received till the filling of this report.

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