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No ‘special discount’ on fuel purchase, says Russian minister

Dalit

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ISLAMABAD: Petroleum Minister Musadik Malik has said that despite the increased yield of furnace oil during the refining as well as high operational costs of the import, the Russian fuel would be significantly beneficial for Pakistan, even as a Russian minister ruled out any sort of exclusive discount for Islamabad on the purchase of ‘Urals’ crude from Moscow.

“Oil deliveries to Pakistan have begun. There is no special discount; for Pakistan, it is the same as for other buyers,” Energy Minister Nikolai Shulginov told the Russian state media on Friday on the sidelines of an international economic conference in St. Petersburg, according to a VOA report.

The Russian minister, however, confirmed that it had started exporting oil to Pakistan and had agreed to accept Chinese currency as payment. But the deal did not include any exclusive discounts on the purchase deal, he added, Prime Minister Shehbaz Sharif announced last week that the first “Russian discounted crude oil cargo” had arrived and offloaded at the port in Karachi. Pakistan’s petroleum minister later revealed that Pakistan had paid in yuan for the first government-to-government Russian crude oil import.

Mr Shulginov confirmed this claim. “We agreed that the payment would be made in the currencies of friendly countries,” said the minister when asked if Pakistan was paying Russia in Chinese currency. He also confirmed that the issue of barter supplies was also discussed, “but no decision has been made yet.”

Musadik says benefits of ‘Urals crude’ purchase outweigh drawbacks

The Russian minister said that the two countries had not yet reached an understanding on prices for the export of liquefied natural gas to Pakistan. He noted that “the discussion is about long-term contracts, but so far, we are talking about spot supplies, and spot gas prices are now high.”

‘Benefits outweigh drawbacks’

Meanwhile, Petroleum Minister Musadik Malik claimed that the supply of crude oil from Russia would be streamlined in the next few months, and after the Pakistan Refinery Limited (PRL), Pak-Arab Refinery (Parco) and private refineries would also start receiving the shipments.

The minister made these remarks in a conversation with anchorperson Shahzeb Khanzada on Geo News on Friday night. He claimed that even though the transportation cost and insurance premiums have increased, besides the yield of furnace oil, the Russian ‘Urals’ crude would still be “significantly beneficial” to Pakistan.

“Our refineries are designed to refine the Arabian light crude because of ‘hydro-skimming’ technology,” he said, adding that all the permutations run by experts proved that Pakistan will still get a significant benefit by using this fuel.

He said before ordering the fuel from Russia, Pakistan had acquired samples of its chemical composition and tested them at its labs. The PRL experts confirmed that this fuel could be used after blending with Arabian light crude: 30-35% Russian fuel could be mixed with the Arabian light crude, which meant that this fuel could account for one-third of Pakistan’s fuel needs.

On the other hand, Parco put the blending ratio at 25-30pc, he said, adding that a private refinery, which he refused to name, put the blending percentage of Russian oil with the Arabia light crude could at 80pc.

The minister admitted that the furnace oil production would increase as compared to the Arabian light crude, but even “if it is exported at a loss, Pakistan would still attain a benefit”. The minister refused to quantify the benefits Pakistan would achieve as a result of the import of Russian oil, calling these details confidential.

Speaking about the payment made in the Chinese currency, he said the payment made in the Chinese currency was not part of the contract and added that Pakistan would pay in any foreign currency available in its reserves. It did not matter for Pakistan if the payment was made in dollars or in any other currency, he said, adding that RMB was used to pay for the first shipment because of the bank’s preference.

At the beginning of the Russia-Ukraine conflict, the price of Russian crude oil dropped relative to international benchmarks. In April, Urals crude, Russia’s flagship export blend, was $35 per barrel cheaper than the Brent benchmark oil price. But this discount shrunk as Russia found alternate buyers, such as Pakistan. Russian Urals crude oil futures traded around $57 per barrel, supported by strong demand, with shipments to both China and India hitting a record high in May. This could reduce the benefit of buying oil from Russia.


Prime Minister Shehbaz Sharif announced last week that the first “Russian discounted crude oil cargo” had arrived...

They lie in your face.
 
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ISLAMABAD —
Russia confirmed Friday that it had started exporting oil to Pakistan and had agreed to accept Chinese currency as payment, clarifying that the South Asian country did not receive any exclusive discounts on the purchase deal.

Pakistani Prime Minister Shehbaz Sharif announced Sunday that the first "Russian discounted crude oil cargo" had arrived and offloaded at the port in the southern city of Karachi.

Sharif touted the shipment as "the beginning of a new relationship" between Islamabad and Moscow. His petroleum minister later revealed Pakistan had paid in yuan for the first government-to-government Russian crude oil import.

Russian Energy Minister Nikolai Shulginov said there was no reduced pricing for Pakistan.

"Oil deliveries to Pakistan have begun. There is no special discount; for Pakistan, it is the same as for other buyers," Russian state media quoted Shulginov as telling reporters on the sidelines of an international economic conference in St. Petersburg.

His remarks raised questions about official Pakistani assertions that Moscow had agreed to supply oil to Islamabad at a discounted price under a deal the two sides negotiated earlier this year.

"We agreed that the payment would be made in the currencies of friendly countries," Shulginov said when asked for a response to Pakistani assertions that the trade is taking place in Chinese currency. He also confirmed that the issue of barter supplies was also discussed, "but no decision has been made yet.”

Cash-strapped Pakistan earlier this month allowed its state and private entities to open barter trade with several countries, including Russia, in an attempt to ease pressure on Islamabad's rapidly depleting foreign exchange reserves.

Shulginov said that the two countries had not yet reached an understanding on prices for the export of liquefied natural gas to Pakistan. He noted that "the discussion is about long-term contracts, but so far, we are talking about spot supplies, and spot gas prices are now high."

Pakistan has purchased 100,000 metric tons of Russian crude oil, of which 45,000 tons arrived earlier this week, said Petroleum Minister Musadik Malik. He told the media on Monday that the payment was made in Chinese yuan and said that there would be a reduction in local oil prices in a few weeks. But Malik did not disclose details such as pricing or the discount Islamabad received, as claimed by Sharif.

However, the deal in yuan marked a significant shift in the U.S. dollar-dominated export payments policy as Pakistan faces a cash crunch and default on external debt.

Energy imports make up the majority of the country's external payments. The foreign exchange reserves held by the central bank have dipped to around $4 billion, barely enough to cover a month of controlled imports.
 
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ISLAMABAD —
Russia confirmed Friday that it had started exporting oil to Pakistan and had agreed to accept Chinese currency as payment, clarifying that the South Asian country did not receive any exclusive discounts on the purchase deal.

Pakistani Prime Minister Shehbaz Sharif announced Sunday that the first "Russian discounted crude oil cargo" had arrived and offloaded at the port in the southern city of Karachi.

Sharif touted the shipment as "the beginning of a new relationship" between Islamabad and Moscow. His petroleum minister later revealed Pakistan had paid in yuan for the first government-to-government Russian crude oil import.

Russian Energy Minister Nikolai Shulginov said there was no reduced pricing for Pakistan.

"Oil deliveries to Pakistan have begun. There is no special discount; for Pakistan, it is the same as for other buyers," Russian state media quoted Shulginov as telling reporters on the sidelines of an international economic conference in St. Petersburg.

His remarks raised questions about official Pakistani assertions that Moscow had agreed to supply oil to Islamabad at a discounted price under a deal the two sides negotiated earlier this year.

"We agreed that the payment would be made in the currencies of friendly countries," Shulginov said when asked for a response to Pakistani assertions that the trade is taking place in Chinese currency. He also confirmed that the issue of barter supplies was also discussed, "but no decision has been made yet.”

Cash-strapped Pakistan earlier this month allowed its state and private entities to open barter trade with several countries, including Russia, in an attempt to ease pressure on Islamabad's rapidly depleting foreign exchange reserves.

Shulginov said that the two countries had not yet reached an understanding on prices for the export of liquefied natural gas to Pakistan. He noted that "the discussion is about long-term contracts, but so far, we are talking about spot supplies, and spot gas prices are now high."

Pakistan has purchased 100,000 metric tons of Russian crude oil, of which 45,000 tons arrived earlier this week, said Petroleum Minister Musadik Malik. He told the media on Monday that the payment was made in Chinese yuan and said that there would be a reduction in local oil prices in a few weeks. But Malik did not disclose details such as pricing or the discount Islamabad received, as claimed by Sharif.

However, the deal in yuan marked a significant shift in the U.S. dollar-dominated export payments policy as Pakistan faces a cash crunch and default on external debt.

Energy imports make up the majority of the country's external payments. The foreign exchange reserves held by the central bank have dipped to around $4 billion, barely enough to cover a month of controlled imports.

What????

Someone told that 30 to 40 % discount or something.

Can't purchase from iran, it is just next to border
 
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It was never about discounted product it was always about the kickbacks they received via intermediaries.
 
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What????

Someone told that 30 to 40 % discount or something.

Can't purchase from iran, it is just next to border

Who was that someone? Haven't you guys been cheerleading for Showbaz?
 
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An incredibly failed country. Pakistan is headed for the gallows. Ready to default.
 
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So Russia sold expensive oil without discount to Pakistan, got it refined in India through which Indian refinery made lots of money, then got it billed in Dubai in yuan and then shipped it to Karachi :enjoy:.
How come it was refined in India? They are talking about using it as a blended oil with Arabian oil.
 
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Anyone got any solid data?

What price the oil was purchased from Russia and what price it was after refining the oil?

The government could have just made use of oil swap. That is get Russian crude and swapped it with other oil shipments. All speculation at the moment.
 
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So, usual priced crude from Russia to India for refining, and then to UAE to be sold to Pakistan?

And Pakistanis were dancing few weeks back about their geo strategic masterstroke? :lol:
 
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Who was that someone? Haven't you guys been cheerleading for Showbaz?

We prefer a useful leader to a cheerleader.

During the Imran Khan tenure, Kashmir issue was solved peacefully. it was a great help to India from Imran.

Practically, Imran khan more suited to India than these leaders, India mostly needs to deal with the PAK establishment because NO leader of Pakistan can do anything.
 
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They Just Wanted To Score On IK These US Touts Were Never Sincere in Buying Russian Crude Oil In The First Place
 
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