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Pakistan Petrol Reserves: The Petroleum Division has warned the State Bank of Pakistan (SBP) that stocks of petroleum products may dry up, as banks are refusing to open and confirm Letters of Credit (LCs) for imports. As reported by The Express Tribune, like other sectors, the oil industry in Pakistan is facing difficulties in opening LCs due to shortage of US dollars and restrictions imposed by the SBP.
One oil cargo of Pakistan State Oil has already been cancelled, while the LC for another cargo to be loaded on 23 January is yet to be confirmed. In a letter to the SBP Governor, the Petroleum Division has drawn his attention to the difficulties faced by oil refineries and marketing companies in setting up LCs.
Planning to import two cargo…
According to sources, Pak Arab Refinery Limited (Parco) plans to import two cargoes of crude oil of 535,000 barrels each, but banks are not willing to open and confirm the LC. The Express Tribune reported that a crude oil cargo of 532,000 barrels for Pakistan Refinery Limited (PRL) is scheduled for loading on January 30. However, its LC is yet to be confirmed and talks are on with a government-owned bank for the same.
Awaiting confirmation of LC by banks
Two petrol cargoes of PSO, which are in line, awaiting confirmation of LC by local banks. According to industry experts, 18 cargoes of petrol booked by other oil marketing companies (OMCs) such as GO, B Energy, Atok Petroleum, Hescol Petroleum and others also need LCs to be opened and confirmed.
Several meetings have been held since the second week of January to deal with the situation. The first such huddle was held on January 13 to highlight the refusal of banks to open LCs in favor of OMCs and refineries for import of crude oil and petroleum products, reports The Express Tribune.
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