Pakistan to pay for Russian energy purchases in ‘currency of friendly countries’: Russian official

[HAIDER]

Pakistan to pay for Russian energy purchases in ‘currency of friendly countries’: Russian official​

Anadolu Agency | Dawn.com | Reuters | Tahir Sherani Published January 20, 2023 Updated about 2 hours ago




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The eighth session of the Pakistan-Russia Intergovernmental Commission was held in Islamabad on Friday, which was co-chaired by Minister for Economic Affairs Sardar Ayaz Sadiq and Russia’s Energy Minister Nikolay Shulginov. — Radio Pakistan
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Pakistan will pay for energy purchases from Russia — when they start in late March — in “currencies of friendly countries”, a top Russian energy ministry official said on Friday during a press briefing, according to Reuters.
The statement comes during the eighth session of the Pakistan-Russia Intergovernmental Commission held in Islamabad today, which was co-chaired by Minister for Economic Affairs Sardar Ayaz Sadiq and Russia’s Energy Minister Nikolay Shulginov.
Shulginov also said that the two countries have agreed on late March as the timeline for crude oil export to Pakistan.
A Russian delegation led by Shulginov is currently visiting Islamabad to discuss ways for improving bilateral economic and trade relations, with the focus mainly on the provision of oil and gas to Pakistan at discounted rates — as announced by Minister of State for Petroleum Musadik Malik last month.
In a joint statement released today, both countries agreed the “oil and gas trade transaction will be structured in a way it has [a] mutual economic benefit for both countries”, adding that the process would be completed within March 2023.
The countries signed an agreement on custom matters, a protocol on the exchange of documents and data on the customs value of goods transported between the countries, and a working agreement on aeronautical products.
The statement further said, “Both sides have agreed to work on a ‘Comprehensive Plan for Energy Cooperation’, which would form the foundation for future work and is to be finalized in 2023.”
Regarding the Pakistan Stream Gas Pipeline Project (PSGPP), both sides agreed to consider it in terms of a “comprehensive infrastructure, which is economically viable for sustainable gas infrastructure development ensuring affordable gas supplies”.
The joint statement stated both countries discussed “innovative ways of doing business, including through barter” and agreed to explore the option further.
They also agreed to share information towards developing and improving rail and road infrastructure while nominating focal persons from both sides to discuss issues concerning connectivity and logistics in Central and South Asia.

Pakistan, Russia finalise consultations​

A Russian delegation led by Energy Minister Nikolay Shulginov called on Prime Minister Shehbaz Sharif in Lahore on Wednesday where they discussed procurement of oil to Pakistan at discounted rates. — Twitter/PakPMO

Pakistan and Russia on Thursday “finalised consultations” to enhance cooperation in areas of mutual interests — a day after they discussed ways for supplying oil and gas to Pakistan on a “long-term” basis — according to state media Radio Pakistan.
The consultations were held in Islamabad between both countries’ energy ministers and other government officials on the second day of the eighth meeting of the Inter-governmental Commission on Trade and Economic, Scientific and Technical Cooperation of Pakistan and Russia.
The visiting delegation had also called on Prime Minister Shehbaz Sharif in Lahore on Wednesday, where “views were exchanged on supplying oil and gas from Russia to Pakistan on a long-term basis”, a statement from the Prime Minister’s Office (PMO) said.



The series of talks follow the claim by Malik last month that Russia had agreed to provide oil to Pakistan at discounted rates to meet the country’s rising domestic and industrial energy demands.
Pakistan would purchase crude oil, petrol and diesel from Russia at discounted rates, he had said.
The vow had come after a Pakistani delegation led by Malik visited Moscow in late November last year to initiate talks for the procurement of oil and gas at discounted prices.
The draft protocol finalised during today’s meeting would be agreed upon and signed at the meeting’s plenary session to be held tomorrow, Radio Pakistan said.
It further said Russia opined that significant progress has been made in various areas, which would ultimately pave the way for deepening and strengthening relations between Pakistan and Russia.

‘Important’ partner in Islamic world​

During the meeting on Wednesday, Shulginov had also delivered a “special message” from Russian President Vladimir Putin to the premier.
In his message, according to the PMO statement, Putin had said that Russia considers Pakistan as its “important” partner in South Asia and the Islamic world and reiterated Moscow’s strong interest in deepening the bilateral relationship.



Meanwhile, Shehbaz had highlighted the importance Pakistan attaches to its relations with the Russian Federation.
He recalled his meeting with Putin in Samarkand, Uzbekistan in September last year and said “important decisions” were reached back then to further strengthen Pakistan-Russia relations.
Federal Minister for Economic Affairs Sardar Ayaz Sadiq, Federal Minister for Commerce Syed Naveed Qamar, Special Assistant to the Prime Minister Tariq Fatimi and petroleum minister Malik were also present in the meeting.
“Matters related to gas pipelines were also reviewed,” the PMO added, referring to the 1,100-kilometre pipeline project stretching from Karachi to Punjab.
Pakistan and Russia have signed two agreements — in 2015 and 2021— for the construction of the $2.5 billion pipeline, which was slated to begin last year but could not be started due to global sanctions on Moscow.
The country has been grappling with increasing energy requirements, mainly oil and gas, together with an inflating current account deficit because of oil payments.
The procurement of oil has long been a centre of local politics, particularly after former premier Imran Khan’s visit to Russia only a day before it launched its war on Ukraine on Feb 24, 2022.



Khan, ousted through a no-confidence vote in parliament in April, had claimed that his Moscow visit was one of the reasons behind his ouster.

PTI agreement during Imran Khan visit to Russia.

 

[Ali_Baba]

So - India can pay for Russian Oil in Indian Rupees but Pakistan has to use the Chinese Yuan - not very well negiotated by the PDM - but then i guess China makes useful things that russia can buy in Yuan and that is less so for Pakistan.

Is there a currency swap agreement between PKR and Yuan ? Does SBP need to buy Yuan on the open market ?? How is the exchange rate for a currency swap agreement set(if there is one that is ).