Pakistan receives its first consignment of Russian crude oil via a discounted agreement. According to a deal that was reached between Pakistan and Russia in April, Pakistan has now received its first cargo of crude oil from Russia. However, experts feel that it will be too soon to determine whether or not the arrangement will give major benefits to Pakistan’s local consumers.
According to the Pakistan Refinery Limited (PRL), the refinery that will be processing the crude oil, a shipment carrying 45,000 metric tons of crude oil landed in the city of Karachi on Sunday, and another 50,000 metric tons are due to arrive later this week. The refinery will be used to process the crude oil.
Shehbaz Sharif, the country’s current Prime Minister, referred to the arrival of the Russian oil as a “transformative day” for the troubled nation.
“I have fulfilled another of my promises to the nation,” he said in a tweet. This shipment of oil from Russia is the very first of its kind to arrive in Pakistan, and it also marks the beginning of a new partnership between that country and the Russian Federation.
After Russia invaded Ukraine the previous year, Western nations retaliated by imposing sanctions on Russia, which included a ban on the country’s oil and gas exports to the European Union and the United States. As fighting continues in Ukraine, Moscow now has access to a third market for its oil after India and China thanks to the pact with Pakistan.
Musadik Malik, Pakistan’s junior minister for petroleum, stated on Monday to a private news station that if the supply from Russia begins on a regular basis, there will be a decrease in the price of gasoline throughout the nation.
“If we start getting one-third of our crude oil from Russia, then there will be a big difference in prices, and the effect will reach people’s pockets,” he added. “If we start getting one-third of our crude oil from Russia, then there will be a big difference in prices.”
In the midst of a severe economic crisis, Pakistan, the world’s fifth-most populous country, is struggling to find enough foreign currency to pay for the importation of fuel. As a result, the country’s fuel imports are suffering.
The transfer of oil takes place at a time when the nation’s foreign reserves total less than $4 billion, which is sufficient to fund fewer than four weeks’ worth of imports. In addition, Islamabad is awaiting a bailout package from the International Monetary Fund (IMF) in the amount of $1.1 billion as part of a $6.5 billion loan program that will come to an end this month.
An energy sector analyst by the name of Farhan Mahmood told me that Pakistan imports approximately 80 percent of its domestic petroleum requirement, which will result in a bill of $13 billion in 2022–23 for the country’s imports. However, he anticipated a reduction in demand for the subsequent fiscal year.
According to him, “looking at the gradual decline we are seeing in petroleum usage, we are forecasting that the import bill may reduce to $10 billion.” “We” are seeing a gradual decline in the amount of petroleum that we are using.” It is unrealistic to think that this import, which is part of a test run, will have an immediate impact because it is only a pilot effort.