Pakistan asks Russia for 30-40% discount on crude oil; Moscow declines

NewsDrum Desk
01 Dec 2022
Pakistan asks Russia for 30-40% discount on crude oil; Moscow declines

Islamabad: A Pakistani delegation holding talks with their Russian counterparts has asked for a 30-40 per cent discount on crude oil, a demand turned down by Moscow which said it could not offer anything right now as all volumes were committed, according to a media report on Thursday.

The delegation — comprising State Minister for Petroleum Musadik Malik, Secretary Petroleum Capt (retd) Muhammad Mahmood, joint secretary and officials of the Pakistan Embassy in Moscow — asked for a discount during talks in Moscow on Wednesday, The News reported.

The talks ended with no cogent conclusion but the Russian side promised to consider Pakistan's demand and to share its decision later on through diplomatic channels, the paper said, citing its sources.

The paper said that Russia can offer crude at the rates it is providing to its large client countries, which are reliable and sound economies, at a suitable time. Right now all volumes are committed with big buyers, sources said.

The Russian side asked Pakistan to first honour its commitment to the flagship project of the much-touted Pakistan Stream Gas Pipeline (PSGP) to be constructed from Karachi to Lahore.

Pakistan's official delegation left for Moscow on November 29 on a three-day visit for talks with the Russian authorities to explore possibilities of import of crude oil at a discounted price, mode of payment and shipment cost.

Citing industrial ministry sources, the paper said that Russian crude oil can be processed in Pakistan’s refineries, and in the past one private refinery had used Russian crude oil to deliver finished products.

The US has made it clear that it has no objections to Pakistan importing Russian crude oil, saying Washington does not currently have sanctions in place against Russian energy exports to other countries.

"We recognise the pressure that governments are facing to secure affordable fuel supplies," the paper quoted a US state department official as saying.

"We have been very clear that each country will have to make its own choices, based on its own circumstances, in terms of energy imports," the official added.

However, the spokesperson warned that Russia’s actions in Ukraine and Europe have shown that it was not a reliable supplier of energy, adding that the US continues to encourage steps to reduce long-term dependence on energy supplies from Russia.

Ahead of talks with Russia, Finance Minister Ishaq Dar had said that the delegation would hold talks with the Russian oil authorities to cut a potential import deal.

In the last few months, Russia has become India's top oil supplier.

China's energy-hungry economy is one of the biggest customers for Russian oil and gas. Its purchases more than doubled compared with a year ago, to USD 10.2 billion in October, as Chinese importers took advantage of discounts offered by Moscow.

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