Pakistan places first order for discounted Russian crude

ISLAMABAD: Pakistan has placed its first order for discounted Russian crude oil under a new deal struck between Islamabad and Moscow, the country’s petroleum minister said, with one cargo to dock at Karachi port in May.

The deal will see Pakistan buy crude oil only, not refined fuels, and imports are expected to reach 100,000 barrels per day if the first transaction goes through smoothly, Minister Musadik Malik told Reuters on Wednesday night.

Russian oil shipment to reach next month: Musadik

“Our orders are in, we have placed that already,” he said.

“Yes it is true that we will be getting only crude, not refined oil,” Malik said in response to confirm sources information whether that’s correct.

He said Pakistan Refinery Limited (PRL) will initially refine the Russian crude, with other refineries to be included later after a trial run.

Russian Energy Minister Nikolay Shulginov led a delegation to Islamabad in January to hold talks on the deal, after which he said oil exports to Pakistan could begin after March.

At the time, Shulginov also said Pakistan will pay for crude oil purchases in currencies of friendly countries.

“We have agreed that the payments will be made in the currencies of friendly countries,” he had said at a joint news conference with Pakistan’s Economic Affairs Minister Ayaz Sadiq in January.

He did not specify the ‘friendly countries’ and neither of the two ministers gave details on the size of the planned purchases.

Earlier, Malik had said that crude oil supply from Russia to Pakistan will start by the end of this month.

He had also assured that domestic gas consumers of Karachi will get adequate gas supply during Sehri and Iftari timings.

In his media talk after convening a meeting with business community at Karachi Chamber of Commerce and Industry (KCCI), Musadik had said negotiations with Russia are going forward on a fast track basis, and the first cargo shipment will reach Pakistan by the end of April.

Last year, Pakistan sent officials to Russia, after Malik said Moscow would sell crude oil at a discounted rate.

Oil and energy make up the largest portion of Pakistan’s import bill and the country is struggling with a balance of payments crises due to dwindling foreign reserves.

Meanwhile, the South Asian nation has also struggled to procure liquefied natural gas (LNG) from the international market because of high spot prices, adding to its ongoing energy woes.

With dwindling local gas reserves, the country began to ration supplies to residential and commercial consumers.