Business

Russian delegation in Pakistan to finalise oil import deal

Published

2 years ago

Farwa

Delegation is here to finalise agreement, including payment mode.
Once deal is done, Pakistan will place order for crude oil purchase.
Russian ship will arrive in 26 days, most probably by mid-May.

ISLAMABAD: Pakistan moved a step closer to sealing its loan deal with Russia as the team has arrived in Karachi to fine-tune the deal on crude oil with counterparts in Pakistan State Oil (PSO), The News reported citing a senior official privy to the development.

“This time, we are expecting all the hurdles will be removed in importing crude oil from Russia,” the official said. However, the Energy Ministry is tight-lipped over the mode of payment and discount on crude oil prices.

It should be noted that last month the technical teams of the Operational Services Centre (PSC) — a Russian state-owned entity — held talks for two days on March 21-22 with the PSO team, which ended without progress on the constitution of Special Purpose Vehicle (SPV) responsible not only for importing the crude but also for the payments.

“The Russian delegation is here now to finalise the government-to-government agreement, including the mode of payment. Russia is currently asking for payment in China’s Yuan or Ruble, but Pakistan wants to pay in rupee,” the official told the publication.

According to inside sources, once the deal is done, Pakistan will place the order to Russia for crude oil purchase.

“The Russian ship will arrive in 26 days, most probably by mid-May. The current Brent price in the international market hovers at $85.16 per barrel whereas the Russian oil is available at $47-48 per barrel.”

At the same time, according to top officials, the State Bank of Pakistan (SBP) is asking some local banks, including the National Bank of Pakistan (NBP), to open letters of credit for importing Russian oil but they are hesitant to do so mainly because of the G7 countries’ regulations of following the price cap of $60 per barrel or below it and making the payments under Society for Worldwide Interbank Financial Telecommunications (SWIFT) arrangement.

The officials said that PSO had never imported crude oil as it only imports finished petroleum products from various sources and diesel from KPC (Kuwait Petroleum Company).

Refineries have been importing crude under long-term agreements from ADNOC and Saudi Aramco. But in the case of Russian crude, refineries will not be involved in the import, but it will be SPV with representatives from PSO and PSC.

“Pakistan may get Russian crude price with a discount close to $50 per barrel, $10 per barrel below the cap price imposed by G7 countries on Russian oil in the wake of the war on Ukraine,” relevant officials hinted.

However, one of the top guns in the coalition government said that the decision to import the Russian crude under the government-to-government agreement at a 30% discount may not provide the required relief as 26 days of transposition from the Russian port to Pakistan port will incur the per barrel shipping cost at $15 per barrel and $ 10 per barrel refining cost will erode the maximum discount.

On top of that, Pakistan refineries will only be able to extract just 10% MS out of Ural crude and 50% furnace oil.

The refineries are already facing the ullage of furnace oil. The only consumption of furnace oil in Pakistan depends upon running the RFO-based power plants.

The industrial sources suggest the government conduct a commercial analysis if the import of Russian oil will benefit Pakistan’s economy or not and, if yes, to what extent.

Business

Pakistan suffers a loss of millions due to inoperable airports.

Published

3 days ago

Farwa

The Pakistani economy is strengthening and trending in the right direction, according to Federal Minister of Finance and Revenue Senator Muhammad Aurangzeb on Thursday.

Speaking at the Pakistan Saudi Arabia Business Forum, Aurangzeb stated that the goal of the government was to support the private sector rather than engage in commerce. His goal was to encourage business-to-business (B2B) trade and investment, thus he welcomed the delegation from Saudi Arabia.

Within the last 12 to 14 months, the minister saw a considerable improvement in macroeconomic stability. With the help of foreign exchange reserves sufficient to cover two months’ worth of imports, Pakistan steadied its currency, decreased its current account deficit to less than $1 billion, and produced a primary surplus.

Strong remittances, expanding exports, and a drop in inflation from 38% to 6.9% have all contributed to the consolidation of these benefits, according to Muhammad Aurangzeb. Companies have also profited from the insurance rate reduction.

Even if Pakistan’s credit rating has improved, more work needs to be done to bring it up to at least a B-. Both on the debt and equity sectors, he claimed, institutional flows were returning to the nation.

As the International Monetary Fund (IMF) board approved an extended program for the nation, the Islamabad Stock Exchange set a record high.

He stated that the IMF program will implement structural reforms in addition to ensuring macroeconomic stability for the long run.

The government of Pakistan remains committed to structural changes, sustainable growth, and tax reform, as stated by Muhammad Aurangzeb.

Business

Pakistan’s economy is getting better, according to Muhammad Aurangzeb

Published

3 days ago

Farwa

The Pakistani economy is strengthening and trending in the right direction, according to Federal Minister of Finance and Revenue Senator Muhammad Aurangzeb on Thursday.

thus,Speaking at the Pakistan Saudi Arabia Business Forum, Aurangzeb stated that the goal of the government was to support the private sector rather than engage in commerce. His goal was to encourage business-to-business (B2B) trade and investment, thus he welcomed the delegation from Saudi Arabia.

As the International Monetary Fund (IMF) board approved an extended program for the nation, the Islamabad Stock Exchange set a record high.

He stated that the IMF program will implement structural reforms in addition to ensuring macroeconomic stability for the long run.

The government of Pakistan remains committed to structural changes, sustainable growth, and tax reform, as stated by Muhammad Aurangzeb.

Business

Remittances from Workers

Published

4 days ago

Farwa

In September of this year, the State Bank of Pakistan reported that remittances from overseas Pakistanis amounted to 2.8 billion dollars, reflecting a 29% increase compared to the remittances received in September of the previous year.

The SBP reports that, with a cumulative inflow of 8.8 billion US dollars in the first quarter of the financial year, workers’ remittances increased by 38.8 percent compared to the first quarter of the previous year.

Remittance inflows in September 2024 were primarily derived from Saudi Arabia at $681.3 million, the United Arab Emirates at $560.3 million, the United Kingdom at $423.6 million, and the United States of America at $274.9 million.