Minister reiterates Russia to give Pakistan discounted crude oil

FOOLS_NIGHTMARE · Dec 16, 2022

Minister of State for Petroleum Musadik Malik said on Friday that Russian officials had “clearly” told Pakistan they would provide discounted crude oil at the same rates as other countries or even lower.

“We are taking talks [with Russia on crude oil] forward,” he said while addressing a press conference in Islamabad.

He said Russia had eight different types of crude oil of which two could be used by refineries in Pakistan. “Before leaving for Russia, we met [officials of these] refineries. PRL (Pakistan Refinery Ltd) informed us that it can use up to 50 per cent light crude oil of Russian origin.

“Parco (Pak-Arab Refinery Limited) said it can use up to 30pc. And Cnergyico said not only can it use the two light crude oils but also the other six crude oils.”

Malik said that as per the team’s discussions with Russian officials, Pakistan would be provided light crude oils at discounted rates which would reduce energy prices in the country.

Russia also said it would provide refined products — petrol and diesel — the rates of which would be decided when the Russian team visited Pakistan, he added.

“When the energy cost goes down, the cost of transport and manufacturing will go down … consequently, the price of every item in a shop will go down. This is the prime minister’s vision.”

In addition, Pakistan was about to sign a trade agreement with Azerbaijan on LNG after which Pakistan would have the capacity to buy any distressed cargo throughout the world at cheap rates, the minister shared.

Malik said a “special strategic cell” had been set up at his ministry that would be responsible for ensuring implementation of any agreements. “A meeting of a [Pak-Russia] inter-governmental commission (IGC) has been proposed to be held in the second week of January.

“Russia’s energy minister is heading the commission. The minutes of our [previous] meeting will be presented. Our strategic cell is making efforts to fulfil all requirements so we can start getting crude oil by the end of the first quarter.”

The minister said Pakistan was also trying to sign a government-to-government agreement with the United Arab Emirates through which Pakistan would get finished petroleum products.

Bilawal’s interview

Responding to a question about Foreign Minister Bilawal Bhutto-Zardari’s interview a day earlier in which he said Pakistan “is not pursuing or receiving” any discounted energy from Russia, Malik said that it was correct Pakistan was not currently buying any oil from Russia.

However, he said that since it was the petroleum ministry’s responsibility to hold meetings with the refineries and understand the blending process, it would share the details with the foreign ministry to “clear confusion”. For this, a list of refineries and the names of the crude oils would be sent to the foreign ministry.

“Perhaps, we need to work harder to take foreign ministry on board. We will send the details that I have put in front of you to the foreign ministry so no ambiguity remains.”

Last week, Malik had announced that Russia had decided to provide crude oil, petrol, and diesel to Pakistan at discounted rates.

He had said that detailed terms and conditions of the discounted oil commodities would be settled during the upcoming visit of the Russian energy minister to Islamabad by mid-January, but rates would be similar to the discount being given to other countries or even cheaper.

However, in an interview with journalists Amna Nawaz and Judy Woodruff on ‘PBS Newshour’ on Dec 14, Foreign Minister Bilawal said: “As far as Russia is concerned, we aren’t pursuing or receiving any discounted energy, but we are facing an extremely difficult economic situation, inflation, pump prices.”

He admitted that Pakistan was facing energy insecurity.

“We are exploring various avenues to expand our areas where we can get our energy from,” Bilawal said, adding that “any energy from Russia will take a long time for us to develop.”

In his press conference today, Malik asserted that his ministry was ready to “clear any confusion” and had only continued talks with Russia after confirming with refineries that they would be able to use the imported crude oil.