Pakistan to Import Russian Crude Oil at a Discounted Price
Date
4/16/2023 4:08:17 AM
(MENAFN) Pakistan's State Minister for Petroleum, Dr. Musadik Malik, announced that the country will place its first order to import Russian crude oil at a "big discount" this month, as it looks for cheaper fuel options amid macroeconomic challenges. Russia agreed in principle to supply crude oil and oil products to Pakistan at cheaper rates this year and signed several memoranda of understanding with the country's energy Ministry.
Pakistan's energy imports during the last fiscal year were valued at USD23.3 billion, accounting for 29 percent of the country's total imports. During the current fiscal year, Pakistan has already imported energy products worth USD7.7 billion, according to the Pakistan Bureau of Statistics. The country's desire to look for cheaper sources of energy has been fueled by its crippling economic crisis after its official forex reserves dipped below USD5 billion and its national currency underwent massive devaluation.
Representatives from state-owned oil companies of both Pakistan and Russia recently concluded discussions on oil trade between the two countries in the southern port city of Karachi. "Hopefully, within this month, we will put out an order, and very soon, we will have the first shipment coming," Malik told Arab News in an interview.
Malik also stated that Pakistan and Russia had taken care of most of the contractual issues and were finalizing the terms and conditions of the deal. He added that Islamabad wanted to conduct its business in a transparent manner and that the discounted price would be below the $60 per barrel price cap imposed by G7 countries to hurt Russia's oil income.
When asked about Pakistan's refineries' capacity to process Russian crude oil, Malik said that the Petroleum Ministry had discussed the issue with Pakistan Refinery Ltd. and Pak-Arab Refinery Co. Ltd. He stated that PRL had indicated that they could use one-third to 50 percent of its crude of light Russian origin while PARCO could include about one-third or about 33 percent of the Russian light crude into its cocktail. Additionally, private sector companies had expressed interest in importing up to 80 percent of Russian crude oil.
This move to import Russian crude oil at a discounted price will provide Pakistan with a cheaper source of energy, which is crucial for the country's economic growth. The development will also strengthen the relationship between Pakistan and Russia, as the two countries have taken steps to enhance their bilateral cooperation in various sectors.
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