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Wednesday April 24, 2024

Russian ship carrying 750,000 barrels crude to arrive in June

By Khalid Mustafa
May 05, 2023

ISLAMABAD: A Russian test cargo carrying 750,000 barrels of crude would likely arrive in the first week of June, which will determine the future of fuel trade if found cheaper after the refining cost, including margin.

A senior official of the Energy Ministry told The News that the cargo might also reach by the end of May. “Pakistan will pay the price of crude most probably in China’s currency—Yuan and the Bank of China may play its role for transactions,” the official said.

However, the official refused to divulge in crystal clear terms the details about the mode of payment and the exact discount arguing it is not in the interest of the country and the seller also does not want to make it public fearing backlash from the other countries buying Russian oil directly from Moscow.

“Russia will provide URAL crude in the test cargo and most probably Pakistan Refinery Limited (PRL) will be tasked to refine the Russian crude,” he added.

Commercial analysis of Russian crude has been conducted in favour of Pakistan’s economy but it will further be cross-checked after refining the Russian oil. The shipping cost of the Russian oil has also been estimated somewhere at $15 per barrel, but it will be finalised after it arrives at the Pakistan port.

Other sources confided that Pakistan has finalised the per barrel price close to $50-52 per barrel against the cap price of G7 countries at $60 per barrel.

Refineries have been importing 80 percent of crude under long-term agreements from ADNOC and Saudi Aramco and in the remaining 20 percent there is a cushion to purchase Russian oil under GtG on a long-term agreement to some extent. But the government would also prefer to keep some cushion for purchasing the crude from international market as the crude price can go down even blow the cost signed under long-terms agreement.

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

However, one of the top guns in the coalition government said that the decision to import Russian crude under the GtG agreement at a 30 percent discount might not provide the required relief.