SINGAPORE, Feb 6: The Pakistan State Oil (PSO) is delaying awarding a tender to buy 75,000 tons of 87-octane gasoline for February-April delivery, as it grapples with decreased funding from the central bank, traders said on Friday.

A central bank spokesman said on Friday that from February Pakistan is phasing out the use of central bank foreign exchange reserves to pay for fuel imports in return for an emergency $7.6 billion loan package from the International Monetary Fund to counter a balance of payments crisis.

“PSO has not awarded the tender due to a lack of money,” a trader familiar with the tender said.

PSO is also seeking support from Middle Eastern oil firms to fill the funding gap after the move to cease the foreign exchange reserves for imports of furnace oil from Feb 1, followed by other refined products in subsequent months.

The gasoline tender closed on Feb 2, and remained valid till Wednesday. It sought two 25,000 tons of 87-octane cargoes and an option to buy an additional 25, 000 tons for delivery between March to April.

Rising regional gasoline prices have also prompted the delay in the tender award, the trader added, but declined to indicate the offer levels.

However, it was not immediately known if the tender has been cancelled or a new one would be issued.

Officials from PSO declined to comment when asked about the status of the tender.

PSO had bought just 25,000 tons of 87-octane gasoline for Dec 19-21 delivery via tender from Trafigura at $104 a ton premium to Middle East quoted on a free-on-board (FoB) basis.

PSO’s purchases for February-April would have added further support to the tight gasoline market in Asia in the face of strong demand from top importer Indonesia and Vietnam.

The strong market is reflected in Asian cracks – the premiums/losses obtained from refining Brent crude into gasoline -- which held firm at $10.72 a barrel, easing slightly from $11.83 on Feb 5, which had surpassed last year’s high of around $11.65 in late February. —Reuters