ISLAMABAD: In a major development, talks between Pakistan and Russia on crude oil imports concluded on Saturday with significant progress on payment mechanisms, officials said.
If the order goes through successfully, Russian crude oil is expected to arrive in Pakistan in May, officials claimed, adding that some minor issues are yet to be resolved in the next few days.
Official sources said that the second round of talks was held on April 13-15 in Karachi. However, officials are tight-lipped on divulging details.
“During the talks, the Russians have taken issue with media reporting of the talks, particularly on crude oil price concessions and payment mechanisms, urging Pakistani counterparts to work with Moscow. Make sure to keep the deal confidential as they don’t want to disclose it. Other Russian crude buying countries. Top officials have also decided not to disclose the payment method and the exact discount.
Earlier, technical teams from Russia’s state-owned Operational Services Center (PSC) held two-day talks with a team from Pakistan State Oil (PSO) on March 21-22, which ended without progress on the constitution of the special. done The Special Purpose Vehicle (SPV) is responsible not only for the import of crude oil but also for payments.
This time a commercial analysis has been done that the import of crude oil from Russia will benefit Pakistan’s economy and to what extent? As it was analyzed that import would be beneficial, Pakistan decided to go for the deal.
“However, Russia asked for payment in Chinese yuan or rubles during the latest talks, but Pakistan wanted to pay in Pakistani rupees”.
The order will be placed soon, it has been revealed. “The Russian ship will arrive in 26 days, probably by mid-May,” he added.
The current price of Brent in the international market is $85.16 per barrel while Russian oil is available at $47-48 per barrel.
According to top officials, the State Bank of Pakistan (SBP) had earlier asked some local banks, including the National Bank of Pakistan, to open letters of credit for importing Russian oil.
Pakistan’s local banks are ready, but with some reluctance, mainly due to G7 countries’ regulations limiting prices to $60 per barrel or less, and the Society for Worldwide Interbank Financial Telecommunication (SWIFT) arrangement. Payments are being made under
Officials said PSO has never imported crude oil as it only imports POL products from various sources and diesel from KPC (Kuwait Petroleum Company).
The refineries are importing crude oil under long-term contracts from ADNOC and Saudi Aramco. In the case of Russian crude imports, the refineries will not be involved, and instead an SPV with representatives from the PSO and PSC will be involved.
“Pakistan wanted to get Russian crude at a discount of around $50 a barrel, $10 a barrel below the price imposed by the G7 countries on Russian oil after the war against Ukraine”.
However, a top coalition government official said the decision to import Russian crude oil at a 30 per cent discount under the GtG deal may not provide the relief it needs. He based his statement on the fact that the shipping cost per barrel in 26 days of transfer from a Russian port to a Pakistani port would be $15 per barrel, eliminating the maximum discount of $10 per barrel refining cost.
