By Staff Reporter
ISLAMABAD: Russia has agreed to sell petroleum products, including crude oil, to Pakistan at a discounted price, a minister said on Monday.
State minister for petroleum Musaddiq Malik said Russia will also supply discounted petrol and diesel to the import-demanded country.
“Russia has decided to provide Pakistan crude at discounted rates… This is the oil that refineries use to produce diesel and petrol… Russia will also give petrol and diesel to Pakistan at lower prices,” the minister told a news conference in Islamabad.
Malik last week led a government team to Moscow to negotiate the deal. The trip comes as the country struggles to meet domestic gas supply needs as winter approaches while battling to contain a current account deficit swelled by energy payments, mostly for oil.
Finance Minister Ishaq Dar last month said that the country is considering buying discounted Russian oil, pointing out that neighbour India has been purchasing oil from Moscow and Islamabad also has a right to explore the possibility.
Monday saw the beginning of the EU embargo and the associated price cap of $60 per barrel on Russian crude oil, which the EU and the G7 imposed in order to reduce Putin’s oil revenues but keep Russian oil flowing.
Many large customers in Asia haven’t joined the price cap mechanism, but China and India are demanding steep discounts for the Russian grades.
Malik said a “government-level” Russian delegation will visit Pakistan in mid-January 2023 to move forward “with multiple deals”.
The minister said the country has approached Russian private companies for long-term liquefied natural gas (LNG) deals as no gas supplies were available with the state-run companies.
“Acting in the best interest of Pakistan, the government approached Russia to resolve fuel woes. We will solve the energy problem. We will begin talks with government-owned companies of Russia soon.”
The minister said the Russian government has invited Pakistan to begin talks on long-term contracts for 2025 and 2026.
Pakistan has struggled a lot with procuring energy this year after the surge in prices for oil, natural gas, and coal.
The country has been unable to procure LNG from the international market because spot prices remain out of its range and shipments under long-term deals remain insufficient to match rising demand.
The minister, however, didn’t go into details whether Pakistan’s crude oil imports from Russia would comply with the $60 price cap, or how much the discount was.
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