Govt writes to refineries about Russian oil

ISLAMABAD:

The government has written letters to local refineries for buying oil from Russia and invited suggestions for this purpose.

The development is being seen as significant progress on the issue of purchase of crude oil from Russia.

The letters, sent by the energy ministry, asked the oil refineries to send their suggestions to the Pakistani government as to what would be the quantity and payment method of oil from Russia and what would be the transportation cost of importing it.

They further inquired as to whether or not buying oil from Russia would affect agreements with Arab countries.

It should be noted that PTI chairman and ex-premier Imran Khan had said that his government wanted to buy cheap oil from Russia but the current government was not willing to do so at a lower price due to US pressure.

India is one of the biggest beneficiaries of sanctions imposed on Russia over its invasion of Ukraine.
It is buying 600,000 barrels a day from Russia for just $30 a barrel. The current price of crude oil in the world market is more than $100 a barrel.

In March, the US had urged India not to proceed with plans to purchase discounted Russian crude oil, saying doing so would be seen as an act of supporting Moscow’s “leadership” as its military offensive in Ukraine continues.

When asked about reports that India was about to accept Moscow’s offer to buy cheaper crude, White House press secretary Jen Psaki had said nations should be cognisant of their role in history when they deal with Russia following its attack on Ukraine.

Psaki, however, noted the apparent deal would not come in conflict with the economic penalties of the West.

Similarly, during a meeting earlier this month, Minister of State for Foreign Affairs Hina Rabbani Khar had clarified that the US and EU sanctions were not applicable on food items and the talks with Russian authorities on wheat import were on a G2G basis.

She had also informed the participants of the meeting that as these were not UN sanctions, which were binding, the follow-up on the previous government’s claim that Russia had also agreed to supply fuel oil at 30% cheaper price was made but no response was received.

Last month, the Foreign Office had not ruled out the possibility of Pakistan importing oil and food products from Russia, saying the country had an “open policy” driven by the national interest to expand economic and trade relations.

“Our policy is clear, you know in terms of expanding economic and trade relations, we have an open policy, driven by national interest. Wherever we see there is a national benefit, we pursue those options and avenues,” FO spokesperson Asim Iftikhar had said at a weekly news briefing.

To revive its stalled $6 billion loan programme, the International Monetary Fund (IMF) had set tough prior conditions – increasing electricity tariffs, the cabinet taking the decision to gradually impose Rs50 per litre petroleum levy to collect Rs855 billion, and ending the government’s role in determining the oil prices.

To meet the IMF conditions, the federal government had recently announced a massive increase in prices of all petroleum products – especially petrol by Rs24 per litre and high-speed diesel (HSD) by Rs59.16 per litre — the third such raise within the last 20 days.

After the increase, petrol is now available at Rs233.89 per litre after a hike of Rs24.03, HSD at Rs263.31 per litre following a rise of Rs59.16 per litre, kerosene oil at Rs211.47 per litre after a surge of Rs29.49 and light diesel oil at Rs207.47 per litre after an increase of Rs29.16.

Earlier this month, Prime Minister Shehbaz Sharif had claimed that his predecessor Imran Khan had “set a trap” for his government by decreasing the prices of petroleum products after assessing that the no-confidence vote against him was going to succeed.

He had also maintained that the IMF lacked trust in Pakistan because the previous PTI government had violated the pact it had made with the global lender.