SINGAPORE, Feb 29: Pakistan State Oil (PSO) agreed to buy up to 1.2 million tons of fuel oil for March-July delivery, the highest import volumes in its semi-term tenders since 2004, at steady premiums, industry sources said on Friday.

The state-oil marketing firm is awarding the tender to Middle East traders Bakri and FAL Oil at premiums of $14-$15 a ton to Middle East spot quotes, on a cost-and-freight (C&F) Karachi basis, steady to the strike price of the previous tender for December to February arrival.

The tender is for 10 firm cargoes of 125-180-centistoke and six optional lots, each of which is 65,000 tons.

It is also expected to award the tender for two firm low-sulphur fuel oil parcels, and two optional lots, of 50,000 tons each, to FAL Oil at premiums of $79-$80 a tonne C&F.

PSO buys fuel oil mainly for power generation. It was not immediately clear why Pakistan raised their purchases.--Reuters