Russia signed several memorandums of understanding with Pakistan’s Energy Ministry and agreed in principle to provide cheaper crude oil and oil products to the country this year.
Dr. Musadik Malik, Pakistan’s State Minister for Petroleum, announced on Wednesday that Islamabad would place its first order to import Russian crude oil at a “big discount” this month as the nation searches for less expensive fuel options amid macroeconomic difficulties and works to complete a Saudi Arabian oil refinery project.
Russia signed several memorandums of understanding with Pakistan’s Energy Ministry and agreed in principle to provide cheaper crude oil and oil products to the country this year. Pakistan is currently in a financial crunch.
The value of energy imports into Islamabad during the most recent fiscal year was $23.3 billion, or 29% of all imports into the nation. According to the Pakistan Bureau of Statistics, Islamabad has already brought in energy goods worth $7.7 billion during the current fiscal year.
Pakistan’s crippling economic crisis, which resulted from its official forex reserves falling below $5 billion and its national currency experiencing a significant devaluation, has fueled its desire to search for less expensive energy sources.
In order to conclude discussions on oil trade between Pakistan and Russia, state-owned oil company representatives from both nations recently gathered in Karachi, a southern port city.
In an interview with Arab News, Malik stated, “Hopefully this month, we will put out an order, and very soon, we will have the first shipment coming.”
When asked if the reduced price would fall below the $60 per barrel price cap set by the G7 to reduce Russia’s oil revenue, he responded, “Obviously, if there is no discount, then what interest would Pakistan have in purchasing the oil? Therefore, it would undoubtedly be on sale.
According to the minister, most of the legal snags had been ironed out between Pakistan and Russia, who were now finalising the agreement’s terms.
“We will place the order once the commercial details have been resolved, which should take about a week. Obviously, it would be a big discount,” he said, adding that Islamabad wanted to conduct its business in a transparent manner.
When asked if Pakistan’s refineries could handle processing Russian crude oil, Malik responded that the Petroleum Ministry had spoken with Pakistan Refinery Ltd. and Pak-Arab Refinery Co. Ltd. about the matter.
According to PRL, one-third to fifty percent of the crude can be of light Russian origin, he said. “We also spoke with PARCO, and they said they could add about 33 percent or one-third of the Russian light crude to its cocktail.”
The minister added that private sector businesses had also shown interest in importing up to 80% of Russian crude oil. Regarding the Saudi oil refinery project, the minister said Pakistan was closely collaborating with the Kingdom, and delegations from the two nations had previously met on numerous occasions to go over the project’s specifics.
He stated, “We have dealt with issues pertaining to the refinery project. In addition to meeting the Saudi team in Abu Dhabi, we travelled to Saudi Arabia for this. The new refinery policy is currently being discussed by the Cabinet; once it is finalised, we will resume negotiations with Saudi Arabia. We are eagerly anticipating it, he continued.
The minister added that private sector businesses had also shown interest in importing up to 80% of Russian crude oil. Regarding the Saudi oil refinery project, the minister said Pakistan was closely collaborating with the Kingdom and delegations from the two nations had previously met on numerous occasions to go over the project’s specifics.
He stated, “We have dealt with issues pertaining to the refinery project. In addition to meeting the Saudi team in Abu Dhabi, we travelled to Saudi Arabia for this. The new refinery policy is currently being discussed by the Cabinet; once it is finalised, we will resume negotiations with Saudi Arabia. We are eagerly anticipating it, he continued.