ISLAMABAD: Pakistan has placed its first order for discounted Russian crude oil under a new commercial deal struck between both the countries.

Confirming the development, State Minister for Petroleum Musadik Malik said that one cargo will dock at port in May (next month).

Russia will send its first consignment of crude oil after Islamabad agreed to Moscow’s demand to import just a “single cargo” to bridge the trust deficit between the two countries. Islamabad will import only one oil cargo as a test case as Russia was initially concerned over the seriousness of Pakistan to mature the oil deal.

Russian oil shipment to reach next month: Musadik

The deal will see Pakistan buy only crude oil, not refined fuels with imports expected to reach 100,000 barrels per day if the first transaction goes through smoothly, Minister Musadik Malik has reportedly said on Wednesday.

Source in the Petroleum Division say that Russia agreed to receive payment in three currencies Russian rubble, Chinese yen, and UAE dirham against the supplies. However, the minister did not disclose the mode of payment. Last week, in a parliamentary committee, the secretary petroleum stated that Pakistan had ready to avail that discounted price which was sanctioned by EU and other counties.

Pakistan’s Refinery Limited (PRL) will initially refine the Russian crude in a trial run. Later, Pak-Arab Refinery Limited (PARCO) and other refineries.

In July 2022, Pakistan’s five oil refineries informed the government that the main problem with a deal with Moscow was that only up to 30 percent of Russian crude could be processed locally due to technical and operational constraints.

The refineries also shared their concerns over how payments would be made and how their LCs [letters of credit] processed as Russian banking channels are closed for international payments.

Copyright Business Recorder, 2023