Will Russian Oil help the crumbling economy of Pakistan?

Pakistan is suffering due to multiple challenges including political instability, economic and energy crisis, and a high inflation rate. Due to expensive oil products and devalued currency, the life of the common man is miserable. The sitting government is trying to find new marketplaces and suppliers of oil around the globe. In Pakistan, it is considered an achievement that Russia will supply crude oil to Pakistan at rates similar to or even lower than other countries in the world.

According to the state minister for petroleum, Dr. Musadik Masood Malik, Moscow will supply crude oil to Pakistan at lower rates. “Discussions of the Pakistani team with the Russian authorities have already been done, light crude oil will be supplied to Islamabad at subsidized rates, which will reduce energy prices in the country. Russia has eight different types of crude oil, and at least two of these could be refined by the three refineries in Pakistan. Russia will provide Ural and Sokol crude oil products at discounted rates to Pakistan. Moreover, Russia will also supply diesel and petrol to us, but the prices will be decided when the Russian team will come to Pakistan”, Dr. Musadik Masood was speaking to the media in Islamabad.

EAT News interviewed Dr. Musadik Malik on this issue, he believed “the purchase of oil from Russia will reduce the cost of energy in the country, which will shrink the cost of transport and manufacturing, and consequently, the price of everything will fall, which is the vision of Prime Minister of Pakistan Mr. Shahbaz Sharif”.

Dr. Musadik Malik who recently visited Russia along with other senior officials of the Ministry of Petroleum told EAT News “sitting government is well aware of the energy needs of the country and we are trying our utmost to meet these necessities on a priority level, indeed, we also trying to overcome the problems linked with growing energy crisis”. Dr. Musadik Malik said, “Russia has decided to give us crude oil at a concessional price and they will also provide refined petrol and diesel at a low charge, an agreement between two countries is expected in January”. However, there was no formal statement from Russia in this regard.

The minister of state said that when he went to Masco, Russian authorities assured us that they will supply crude oil and petrol at cheap rates. They have eight different types of crude oil, out of which Siberian and Ural crude oil can be used in local Pakistani refineries. “We visited Petroleum refinery company – Pakistan Refinery Limited (PRL)-, and met with the authorities before going to Russia where we were told that they can use 50% of Russian Siberian light oil while Pak-Arab Refinery Company Limited (PARCO) informed that they can use 30% of light crude”, Dr. Musadik was speaking to EAT News.

During an informal talk with media men in Islamabad, the state minister for petroleum answered the question on the provision of Russian. When he was asked about Pakistan’s Foreign Minister Bilawal Bhutto Zardari’s denial of the news of the purchase of petroleum products from Russia, Dr. Musadik replied, “Perhaps the information in this regard did not reach the Ministry of Foreign Affairs, that’s why they spoke like that. all actions and decisions related to energy matters in the country are the responsibility of my ministry. We will send the brief regarding the talks with Russia and the purchase of oil from there to the Ministry of Foreign Affairs as soon as possible”.

Earlier, the foreign minister of Pakistan Mr. Bilawal Bhutto Zardari, during his visit to the USA, said in a press briefing that Pakistan does not have a proper system that can clean Russian crude oil. “We may do something in this regard in the future, however, it is not likely to happen soon. At present, Pakistan is not buying oil from Russia, but we are procuring wheat from them” the foreign minister told the international media.

Mr. Malik shared that in January, an intergovernmental commission expected to visit Pakistan, headed by the Russian Petroleum Minister himself, who is also coming to Pakistan. At that time, we will try to finalize the deal of oil, diesel, and crude oil from Russia.  

The Minister of State said that the strategic cell of the Ministry of Petroleum is trying to prepare all the matters before the arrival of the Russian team so that we can start taking oil at the end of the first quarter of the current year because the talks have been going on for a long time, indeed, we will share the details with media, once contract will be finalized between the two countries.

Talking about the different international accords to address the energy crisis of Pakistan, Dr. Musadik Malik told EAT News, “an agreement is about to be concluded with Azerbaijan, which will provide cheap gas (LNG) to Pakistan, meanwhile we are going to restore the agreement to buy pipeline gas from Turkmenistan at a cheaper price for which a special cell has been created in the Ministry of Petroleum as LNG prices are higher so we will prefer pipeline gas on low rates”.

The current government is also making an agreement with the United Arab Emirates (UAE) in the field of energy, under which at least two cargoes of petroleum products will be received soon.

The sitting government is claiming that it is their priority to provide relief to the poor people of the country to make their lives easier, unfortunately, the prevailing situation is not good for the common man: Inflation and shortage of daily usage items have made their life miserable. The people of Pakistan are expecting immediate relief from the government.