Russian Energy Minister Denies Special Discount on Oil for Pakistan

Contrary to circulating rumors, Russian Energy Minister Nikolai Shulginov has declared that Pakistan is not receiving a special discount on oil imports from his country.

Shulginov, while speaking to reporters, confirmed the initiation of oil deliveries to Pakistan but emphatically stated, “There is no special discount; for Pakistan, it is the same as for other buyers.”

The clarification was made during an international economic conference in St Petersburg. Shulginov also disclosed that payments for the oil would be made in Chinese currency, negating any notion of exclusive arrangements. However, he admitted that no firm decision had been taken yet on barter supplies.

Pakistan’s New Trade Relations

Pakistan made provisions for barter trade with Afghanistan, Iran, and Russia, including trade for petroleum, LNG, coal, minerals, metals, and other commodities. Despite these developments, Shulginov expressed that Russia and Pakistan were yet to agree on the export prices for liquefied natural gas.

Prime Minister Shehbaz Sharif and Petroleum Minister Musadik Malik have welcomed the new oil cargo from Russia, viewing it as a step towards economic growth and energy security. Yet, the exact details of the trade deal remain undisclosed.

Pakistan’s Diversification in Oil Imports

Pakistan, which imports 70% of its crude oil, is making strides towards diversifying its oil sources in the face of escalating global prices. The crude oil is primarily refined by PRL, National Refinery Limited, Pak Arab Refinery Limited, and Byco Petroleum, while the rest is locally produced and refined.

The recent decision to import oil from Russia, a major crude oil producer, marks a pivotal shift in Pakistan’s energy procurement strategy. The payment for these imports will be facilitated through the Bank of China using Chinese currency.