‘Importing Russian petrol more feasible than diesel, oil’

KARACHI: The import of petrol from Russia would be economically feasible and attractive for the country compared to diesel and crude oil, the people in the oil industry believed.

As a high level delegation of government left for Russia to formally start the negotiations with the Russian authorities over the import of energy products, the country’s local oil industry urged that delegation to focus more on petrol import as it would be commercially and economically feasible for the country.

Pakistan has long-term contracts for import of diesel and crude oil with the Middle Eastern countries. It would be a very difficult condition to immediately switch over to the Russian market for diesel and crude oil import by pulling out from these long-term contracts, those from the oil industry pointed out.

Local oil sector does not have long-term contracts with any country for petrol import, so it could easily be imported from Russia at discounted prices. This, they said could provide the much needed relief to consumers who had been bearing the high cost of fuel prices, especially diesel and petrol in the recent months.

The industry has given these suggestions to the government when it held a zoom meeting to take the inputs from the oil industry and other stakeholders. About the import of petrol, people from the sector believed that Pakistan needs Russian crude oil, petrol and diesel at major discounted rates.

“A discount of five to ten dollars would not help the country as the freight cost and insurance cost would come around ten dollars and in some cases even more than that,” the chief executive of an oil firm said.

He pointed out that Middle Eastern crude oil reaches Pakistan in three days whereas it would take more than three weeks for Russian oil to reach Pakistan, which means Pakistan needed a more than twenty dollars discount on these imports.

Sector people said that there might be some hurdle if Pakistan stuck to the policy of the United States and its allies over capping of Russian oil. Russia has publicly announced that it would not supply oil and gas to countries, which support the capping of Russian oil.

Pakistan supported the decision to cap the price of Russian, and was allowed by the US to go for Russian oil under this capping.

Now, the big question was how the Pakistani delegation would convince Russian authorities to supply oil and gas on discounted rates while following the capping of prices of Russian oil, the industry people said.