Pakistan is making concerted efforts to procure Russian crude oil at USD 50 per barrel, at least USD 10 per barrel less than the price cap imposed by the G7 countries due to Moscow’s invasion of Ukraine, PTI reported.
Crude oil is currently being sold globally at USD 82.78 per barrel, the report said.
Moscow will respond to Pakistan’s request for discounted crude oil only after it completes formalities such as mode of payment, shipping cost with premium, and insurance, according to The News.
The first consignment of crude oil from Moscow is scheduled to arrive in Pakistan by the end of next month, paving the way for a bigger deal in the future, the report said.
The shipping of crude oil from Russian ports will take 30 days, which would mean an increase of USD 10-15 per barrel due to the transportation costs, it added.
Russia was initially concerned “over the seriousness of Pakistan to mature the oil deal,” but in a recent meeting between officials from the two countries, Moscow asked Islamabad to import “one oil cargo” as a test case to bridge the trust deficit, according to The Express Tribune newspaper.
Pakistan will first import one Russian crude oil ship to test landed cost, The News reported.
Since Pakistan is facing a US dollar liquidity crunch, it would pay Russia in the currencies of friendly countries that include China, Saudi Arabia, and UAE, it said.
In December last year, Russia refused to provide Pakistan with a 30 per cent discount on its crude oil after the Pakistani delegation asked for a reduction in price.
Energy accounts for the biggest share of Pakistan’s imports, and cheaper oil from Russia will help Pakistan in containing the ballooning trade deficit and balance-of-payments crisis.