ISLAMABAD – The government of Pakistan has solicited industry experts’ opinions on oil imports from Russia.
The move to buy oil from Russia at a cheaper rate comes at a time when the country is suffering from a very acute financial crisis and the IMF is reluctant to approve the next tranche of the multi-billion dollar loan program.
Pakistan’s monthly heating oil imports will hit a four-year high in June, according to Refinitiv data.
The country’s heating oil imports could rise to about 700,000 tonnes this month after hitting 630,000 tonnes in May, according to Refinitiv estimates. Imports most recently peaked in May 2018 at 680,000 tons and in June 2017 at 741,000 tons.
In a letter to the directors of Pak-Arab Refinery, National Refinery, Pakistan Refinery and Byco Petroleum, the Pakistan Energy Ministry instructed them to submit the following analysis:
Technical sustainability of crude oil grades in terms of each refinery configuration and yield (vol%). Quantity and quality of the relevant crude oil required by the refinery.
Transport/freight analysis for imports from Russia versus normal imports from the Middle East based on a cost-benefit analysis. Existing commitment for funding from the Arabian Gulf region in relation to temporary contracts.
A day ago, Minister of State for Petroleum Musadik Malik said in a TV program that Pakistan is “open to the idea of importing cheap oil from Russia”.
He said that contrary to the PTI-led government’s claims, there are no official agreements between the two countries to import cheap oil. However, a letter was sent to Russia from the previous government.
The state minister added that if Russia were willing to sell oil to Pakistan at cheaper prices, the government would definitely consider the option but would “ensure strong deals that would not result in any international sanctions against Pakistan.”
On the other hand, Finance Minister Miftah Ismail said earlier this month that Western sanctions have made importing oil from Moscow impossible, despite requests from the Pakistani government to buy wheat from Russia and Ukraine.
Miftah also stated that Pakistan would certainly consider whether Russia would offer the oil trade at cheaper prices as there are no restrictions on buying the supplies.
Former finance minister and senior PTI leader Shaukat Tarin also said the coalition government “should have bought cheap oil from Russia” as the previous government of Imran Khan had already written a letter to that effect.