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Tuesday, January 31, 2023

Russia to provide crude oil to Pakistan at discounted rates: Petroleum minister

Russia will sell oil to Pakistan at a discounted price, Pakistan’s state oil minister said on Monday, days after he led a government team to Moscow to negotiate the deal.

Russia will also supply discounted petrol and diesel to Pakistan, Musaddiq Malik said at a press conference in Islamabad.

He did not specify the price of the discounted Russian crude or say whether imports would meet the $60-a-barrel cap imposed on Russian offshore oil by rich G7 nations and the EU this week over Russia’s invasion of Ukraine. Moscow has said it will not sell to countries that comply with the limit.

Russia’s Energy Ministry did not immediately comment on the discount for Pakistan.

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“Their government has also invited Pakistan to start negotiations on long-term contracts for the purchase of liquefied natural gas (LNG),” he said, adding that Islamabad was already in talks with Russian private companies to import LNG.

Malik led a delegation to Moscow on November 28.

Pakistan has not been able to source LNG from the international market as spot prices remain out of range and supplies under long-term deals remain insufficient to meet growing demand.

With local gas supplies dwindling, the country began rationing supplies to domestic and commercial consumers. Local media also reported that oil stocks remained weak due to difficulties in paying for imports.

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Oil and energy form the largest part of Pakistan’s import bill.

With foreign exchange reserves that stood at just $7.5 billion as of November 25, barely enough for more than a month of imports, and a growing current account deficit, the South Asian economy is facing balance of payments crises.

Moscow and Islamabad also worked for a long time on a gas pipeline project, which was not very successful.

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