Pakistan to import discounted crude oil from Russia

ISLAMABAD, 6 Dec 2022:

Pakistan is set to import crude oil at discounted rates from Russia, the state minister for petroleum said yesterday, days after he led a government delegation to Moscow.

Addressing a press conference in Islamabad, Musadik Malik said Russia has also decided to provide petrol and diesel at lower rates to Pakistan.

“Russia has decided to provide Pakistan crude at discounted rates (…) this is the oil that refineries use to produce diesel and petrol,” Malik said. “Russia will also give petrol and diesel to Pakistan at lower prices.”

The minister said the delegation also held talks with some private companies that were a part of the Russian delegation to negotiate the import of liquefied natural gas (LNG) because the Russian government was short on it.

“Talks with Russia private firms are underway for the import of LNG, while we have also engaged Russia’s state LNG producers.”

Last month, finance minister Ishaq Dar had revealed that country was considering buying discounted Russian oil, underlining India had been purchasing oil from Moscow, and that Islamabad too had the right to do the same.

Malik flew with his delegation to Russia last week for negotiations on issues that included oil and gas supplies to the energy-starved Asian country.

Malik revealed yesterday the Russian government has been setting up new factories for the production of LNG and they have invited Pakistan to begin talks on long-term contracts for 2025 and 2026 in this regard.

According to the minister, significant progress has been made in talks over gas pipeline projects in Pakistan, including the Pakistan Stream (north-south pipelines) and another big pipeline for piped gas from abroad.

Malik added that an inter-governmental delegation from Russia would be visiting Pakistan in January next year for further discussions.

“We will try that all these things will be transformed into a proper agreement by then and could be signed. Our visit to Russia turned out to be more productive than expected,” he stressed.

However, Malik did not elaborate on the price of the oil or when the discounted Russian oil would reach Pakistan.

The prosperous G7 countries and the EU have imposed a cap of US$60 per barrel on the Russian seaborne oil over its invasion of Ukraine.

Moscow has responded saying it will not sell oil to countries that comply with the cap.

Earlier in the day, finance minister Ishaq Dar approved the import of 450,000 tonnes of wheat from Russia on a government-to-government basis, after a meeting of the Cabinet’s Economic Coordination Committee meeting.

Pakistan is striving to meet its domestic energy needs as winter sets in, with the country of 220 million people battling to contain a current account deficit and facing lower foreign currency reserves.

As of Nov 25, Pakistan had foreign reserves of US$7.5 billion, equivalent to a little over a month’s expenditure of imports. Oil and energy make up the largest amount of the country’s import bill.

– EFE