Pakistani refineries will start receiving crude oil from a Russian company by the end of April.
Minister of State for Energy Musaddiq Malik told reporters on Thursday that a commercial deal will be signed between government-owned entities on both sides in March, after which it would take at least 3 weeks before Pakistan starts receiving Russian crude oil at affordable rates.
Regarding the mode of payment, the minister said it would be finalized during the commercial agreement dialogue and the use of currencies other than the US Dollar is also possible. He remarked, “The deal is part of a holistic plan for energy security which was finalized in October 2022 for a sustainable supply of gas and oil at a cheaper rate to save foreign exchange by reducing the import bill”.
The minister added that under the energy security plan, Russian and Pakistani companies would ink spot purchase and long-term LNG contracts to meet rising gas demand in the 2023 winter.
He explained, “The corrective measures in the gas sector is a result of no protest of gas load-shedding in winter as gas is available at cooking times and as additional LPG cylinders are available at the OGRA’s prices at the counters set up by both gas companies across the country”.
The minister was of the view that the private sector was opposed to the government’s decision to import gas through gas companies and to fully utilize the LPG terminal, which was previously operating at 20-25 percent capacity.
He reiterated the significance of the Russian oil deal and further informed that the local refineries may get $10-14 billion in additional capital in the coming months.