The first shipment of discounted Russian crude arrived in Karachi on Sunday after Islamabad and Moscow signed a deal
Posted Date – 11:00 PM, Mon – 6/12/23
Karachi: Pakistan began shipping much-anticipated discounted Russian crude to a refinery in the country’s port city on Monday, a development that could provide relief to those battered by soaring inflation.
The first shipment of discounted Russian crude arrived in Karachi on Sunday after Islamabad and Moscow signed an agreement in April.
Of the 45,000 metric tons of crude oil, 3,000 metric tons were offloaded from Russian ships to Pakistan Refinery Limited, Geo TV reported.
According to reports, it took more than 20 days for Russian crude oil to arrive in Pakistan and all will be transferred to the refinery tomorrow.
According to reports, Russian crude arrived in Pakistan at a price of US$50-52 per barrel, compared with the price ceiling imposed by the G7 countries at US$60 per barrel.
“I have fulfilled another of my promises to the country. Pleased to announce that the first cargo of discounted Russian crude oil has arrived in Karachi and will start unloading tomorrow,” Prime Minister Shehbaz Sharif said in a tweet on Sunday.
“Today is a day of change. We are moving closer to prosperity, economic growth, energy security and affordability,” he said.
Sharif added that this was the beginning of “a new relationship between Pakistan and the Russian Federation”. According to news reports, after the crude oil is refined, a test report will be submitted to the government on the quality, yield, transportation cost and commercial viability of the crude oil.
Following approval, the government will enter into a long-term intergovernmental agreement with Russia, the report said.
Payments for Russian crude oil will be made in Chinese yuan through the Bank of China, Geo News reported.
Pakistan, currently grappling with high foreign debt and a weak currency, hopes that a discounted purchase of crude from Russia will stabilize oil prices in the country.
After the latest revision, petrol prices in the country are now at Rs 262 per liter.
Pakistan, currently grappling with high foreign debt and a weak currency, hopes that a discounted purchase of crude from Russia will stabilize oil prices in the country.
Energy accounts for the lion’s share of Pakistan’s imports, and cheap oil from Russia will help Pakistan stem a ballooning trade deficit and balance-of-payments crisis.
Last year, Pakistan imported about 154,000 barrels of oil per day, with about 80% of the supply coming from Saudi Arabia, the United Arab Emirates and other Gulf states.
The country’s total foreign exchange reserves fell to around $3.9 billion in the week ended June 2, State Bank of Pakistan data showed.
Pakistan’s inflation rate accelerated to 38% in May from a record high of 36.4% in April, according to the central bank.
Last year’s catastrophic floods submerged a third of the country, displaced more than 33 million people and cost Pakistan’s already crumbling economy $12.5 billion.
Pakistan and the International Monetary Fund failed to reach a staff-level agreement on a much-needed $1.1 billion rescue package aimed at preventing the country from going bust.
The funds are part of a $6.5 billion rescue package approved by the International Monetary Fund in 2019, which analysts say is crucial if Pakistan is to avoid default on its foreign debt.
Pakistan’s purchases provide Russia with new crude customers beyond India and China.
The United States and other Western countries have imposed a series of severe economic sanctions on Russia since the outbreak of the Ukraine war last year.
