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Russian delegation in Pakistan to finalise oil import deal



  • 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.


Moody’s says the IMF programme will increase Pakistan’s foreign financing.




Moody’s, a reputable international rating agency, has stated that Pakistan’s chances of acquiring funding will increase as a result of the recent agreement with the International Monetary Fund (IMF), which offers dependable sources for that purpose from both friendly countries and international financial institutions.

According to a recent Moody’s analysis on Pakistan’s economy, social unrest and tensions could result from Pakistan’s ongoing inflation. The country’s economic reforms may be hampered by increased taxes and potential changes to the energy tariff, it continued.

Moody’s, on the other hand, agrees that the coalition government headed by Shehbaz Sharif of the PML-N is in danger of failing to secure an election mandate, which may potentially undermine the successful and long-lasting execution of economic reforms.

The government’s capacity to proceed with economic changes may be hampered by societal unrest and poor governance, according to Moody’s.

In order to appease the IMF by fulfilling a prerequisite for authorising a rescue package, the government raised the basic tariff on electricity, which coincided with the most recent increase in fuel prices announced on Monday. This report was released by Moody’s.

Food costs have increased in the nation, where the vast majority is experiencing an unprecedented crisis due to the high cost of living, following the government’s earlier presentation of a budget that included a large increase in income tax for the salaried classes and the implementation of GST on commodities like milk.

The most recent comments were made following Islamabad’s achievement of a staff-level agreement for a $7 billion contract that spans 37 months and is contingent upon final approval by the IMF Executive Board.

It states that Pakistan will need foreign financing totaling about $21 billion in 2024–2025 and $23 billion in 2025–2026, meaning that the country’s present $9.4 billion in reserves won’t be sufficient to cover its needs.

Therefore, according to Moody’s, Pakistan is in an alarming position with regard to its external debt, and the next three to five years will be extremely difficult for the formulation and implementation of policies.

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Base Of bilateral relations: China And Pakistan Reiterate Their Support For CPEC




China-Pakistan economic corridor is a major project of the Belt and Road Initiative, and both countries have reiterated their commitment to it. It remains a fundamental aspect of their bilateral relations.

Vice Chairman Zhao Chenxin of the National Development and Reform Commission of China and Minister Ahsan Iqbal of Planning and Development met in Beijing, where Ahsan Iqbal made this assurance.

The summit made clear how committed China and Pakistan are to advancing their strategic cooperative partnership in all weather conditions.

The focus of the discussion was on how the CPEC was going, with both parties reviewing project development and discussing how the agreement made at the leadership level will lead to the launch of an enhanced version of the CPEC.

In order to improve trade, connectivity, and socioeconomic growth in the area, they emphasised the need of CPEC projects.

The Ml-I Project, the KKH realignment, and the Sukkur-Hyderabad motorway—the last remaining segment of the Karachi-Peshawar motorway network—were all to be expedited.

Expanding the partnership’s horizons to include technology, innovation, education, connectivity, and renewable energy sources was another topic of discussion.

Specifically in the special economic zones being built under the Comprehensive Economic Cooperation (CPEX), Vice Chairman NDRC emphasised the possibility of China investing more in Pakistan.

In addition to expressing confidence in the ongoing success of the two nations’ collaboration, Zhao Chenxin reiterated China’s support for Pakistan’s development aspirations.

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Pakistani government raises petrol prices




A recent announcement states that the price of petrol has increased by Rs 9.99 per litre, to Rs 275.60 per litre.

The cost of high-speed diesel has also increased significantly, rising by Rs 6.18 a litre. Diesel is now priced at Rs 283.63 a litre.

Furthermore, kerosene now costs Rs 0.83 more per gallon.

The cost of products and services is predicted to rise in response to the increase in petroleum prices, further taxing household budgets and jeopardizing the stability of the economy.

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