Russian Energy Minister Clarifies Pricing for Oil Imports to Pakistan
Russian Energy Minister Nikolai Shulginov has clarified that Russia is not providing Pakistan with oil at a special discount. The Voice of America (VOA) reported that the Russian state media confirmed oil deliveries to Pakistan had commenced, and there was no preferential treatment in terms of pricing for Pakistan compared to other buyers. Shulginov made these statements during an international economic conference in St. Petersburg.
Although the payment for the oil will be made in the currencies of friendly countries, Shulginov dismissed the notion that Pakistan received exclusive discounts on the deal. This contradicts earlier claims that Pakistan had secured a special discount for imported oil. However, Shulginov did confirm that they had agreed to accept Chinese currency (Yuan) as payment for the oil.
During discussions, the issue of barter supplies was brought up, but no decision has been reached yet. Pakistan recently issued a special order allowing barter trade with Afghanistan, Iran, and Russia for various items, including petroleum, liquefied natural gas (LNG), coal, minerals, metals, wheat, pulses, and other food items. The Russian minister mentioned that they are still in the process of determining the prices for exporting LNG to Pakistan. At present, they are discussing spot supplies, and the prices for spot gas are currently high.
Prime Minister Shehbaz Sharif had previously highlighted the import of Russian oil as an achievement for Pakistan. The first shipment of "Russian discounted crude oil" arrived in Karachi and was offloaded at a port, according to a tweet by the Prime Minister. He emphasized that this marks the beginning of a new relationship between Pakistan and the Russian Federation, and the country is moving towards prosperity, economic growth, and energy security.
Petroleum Minister Musadik Malik later revealed that the payments for the oil were made in Chinese yuan. He disclosed that Pakistan had purchased 100,000 metric tonnes of Russian crude oil and the payment was conducted through the Bank of China. However, specific details about the commercial aspects of the deal, such as pricing and the discount received by Pakistan, were not disclosed.
Pakistan relies on imports for 70% of its crude oil, which is refined by companies such as PRL (Pakistan Refinery Limited), National Refinery Limited, Pak Arab Refinery Limited, and Byco Petroleum. The remaining 30% is locally produced and refined by domestic refineries like Attock Refinery Limited. The decision to import oil from Russia is part of Pakistan's efforts to diversify its sources of oil imports, particularly due to escalating global prices. Russia, being a major crude oil producer, has offered discounted prices to Pakistan, and the payment for the imported crude will be made in Chinese yuan through the Bank of China.
In conclusion, Russian Energy Minister Nikolai Shulginov clarified that Pakistan is not receiving special discounts on oil imports from Russia. While the payments will be made in the currencies of friendly countries, there is no exclusive pricing arrangement for Pakistan. The issue of barter supplies has been discussed, but no decision has been made yet. The import of Russian oil marks a significant milestone for Pakistan, and the payment for the oil was made in Chinese yuan. This move reflects Pakistan's efforts to diversify its sources of oil imports amid rising global prices.
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