Image: Reuters Berita 24 English - Pakistan's monthly fuel oil imports are expected to reach a four-year high in June, according to da...
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| Image: Reuters |
Berita 24 English - Pakistan's monthly fuel oil imports are expected to reach a four-year high in June, according to data from Refinitiv. This is because the country is having trouble buying liquefied natural gas (LNG) to make electricity because of a heatwave, which is driving up demand.
The fact that power plants are using residue fuel again shows how bad the energy crisis in the South Asian country is and makes it harder for the country to switch to cleaner fuel.
Pakistan stopped importing fuel oil in the second half of 2018 because LNG prices were low, but since July 2021, when LNG prices went through the roof, it has had to switch back to oil.
Refinitiv estimates that the country's fuel oil imports could reach about 700,000 tonnes this month, up from 630,000 tonnes in May. Imports peaked in May 2018 at 680,000 tonnes and in June 2017 at 741,000 tonnes.
A spokesman for Pakistan's energy ministry said that the rise in fuel oil imports was due to the price of oil on the world market.
Industry sources say that this trend will continue in July as well, as Pakistan State Oil (PSO) has received offers from Coral Energy to supply two high sulphur fuel oil (HSFO) cargoes and one low sulphur fuel oil (LSFO) cargoes for delivery in the second half of July. According to its website, PSO had asked for five loads in the tender.
"Import data shows that thermal power companies in Pakistan made the first switch from gas to fuel oil late last year, and the price trend gives them a reason to keep buying as much fuel oil as they can instead of LNG," said Timothy France, a senior oil analyst at Refinitiv who focuses on the Middle East and North Africa.
Asia LNG spot prices went up last week, just like European gas prices, because a U.S. export plant was closed for a long time, which made Japan and South Korea buy more.
Pakistan LNG tried to buy four LNG cargoes for delivery in July for the second time. On Thursday, QatarEnergy was the only company to offer to sell one cargo.
Pakistan LNG, on the other hand, did not accept the bid because of how much it would cost.
Since the country is having a hard time getting enough energy, people have been trying to use less so that there won't be any blackouts.
"The weather in Pakistan seems to be very good for demand. Cooling demand is usually high until about the middle of September, so imports could stay high in June, July, and August "France joined in.
The amount of electricity made with fuel oil was pretty stable from one year to the next, but it went up 15% from April to May, according to data from Topline Research.
