By News Desk
ISLAMABAD: Pakistan paid for its first government-to-government import of discounted Russian crude oil in Chinese yuan, petroleum minister said on Monday, a significant shift from its dollar-dominated export payments policy, Reuters reported on Monday.
The first cargo of 100,000 tonnes of Russian Urals crude oil arrived in Karachi on Sunday under a deal struck between Islamabad and Moscow April this year.
The deal gives Pakistan a respite from its economic crisis and balance of payments problem, while giving Russia a new outlet in South Asia. The country is also seeking to diversify its sources of oil imports, as its reliance on Middle Eastern crude has made it vulnerable to price volatility.
Petroleum Minister Musadik Malik told Reuters that the payment was made in yuan, but did not disclose the pricing or the discount that Pakistan received.
He said Pakistan’s Refinery Limited (PRL) will refine the crude, which will be blended with Arabian light crude and marketed locally.
“We’ve run iterations of various product mixes, and in no scenario will the refining of this crude make a loss,” Malik said. “We are very sure it will be commercially viable.”
He said Pakistan was looking to target one-third of its total oil imports at the Russian crude, which is one of the lighter grades available.
Malik said that the purchase of Russian crude was a “win-win” for Pakistan, as it would save the country money and help to diversify its sources of oil imports.
Pakistan imported 154,000 barrels per day (bpd) of oil in 2022, mostly from Saudi Arabia and the United Arab Emirates, data from analytics firm Kpler showed.
The deal also presents a new avenue for Pakistan at a time when its financing needs are great. Islamabad earlier this month outlined a process to open barter trade with Russia, Afghanistan and Iran, another sign of the South Asian economy seeking alternatives to trading in dollars.
Copyright © 2021 Independent Pakistan | All rights reserved
