Monday April 15, 2024

Refinery work dents demand for Russian oil

By Tanveer Malik
December 07, 2023

KARACHI: Pakistan, which imported three cargoes of Russian crude oil in the past six months, is likely to see a slowdown in its purchases from the world's second-largest oil exporter in the coming months, due to local refineries' lack of plans for further imports in the near future, industry officials said on Wednesday.

Pakistan Refinery Ltd. (PRL), which imported the first cargo of 10,000 tons of Russian crude oil in June, has no plans to purchase additional crude oil until March next year. 

Active pump jacks increase pressure to draw oil toward the surface at the South Belridge Oil Field on February 26, 2022, — AFP
Active pump jacks increase pressure to draw oil toward the surface at the South Belridge Oil Field on February 26, 2022, — AFP

"We are not importing Russian crude oil in the next two months as the refinery is scheduled for a lengthy shutdown exceeding one month in January and will resume operations in mid-February next year," a top PRL official told The News.

PRL has no intention to import Russian crude oil despite indicating its interest in December when both countries negotiated the long-term crude oil import supply contract in October.

The refinery, which imported the Russian oil on a government-to-government basis, will adopt commercial terms for its next purchase.

"The first cargo was imported on a G2G basis, however, the next cargo would be on commercial terms as the concept of importing the Russian crude oil on a government-to-government basis has been abandoned."

Pakistan and Russia struck a deal for Russian crude oil supply to Pakistan at the start of this year, and the country placed its first order in April. However, imports have not picked up pace as most refineries have shown little interest in buying Russian oil.

Cnergyico Refinery, which imported two shipments of Russian crude oil totaling 100,000 tons and 10,000 tons in October and November, respectively, has not disclosed any plans for further imports in the near future. The refinery declined to comment when The News inquired about its future plans.

PARCO, a refinery with partial ownership by the United Arab Emirates, has no intention of importing Russian crude oil, oil industry sources said. National Refinery Ltd. (NRL) has also not expressed any interest in it.

"Attock Refinery Ltd., which runs on local crude and is located in the north of the country, does not see the import as economically feasible," they added.

Oil sector people said that Russian crude oil import would benefit the refineries, however, there is no possibility of consumers receiving any benefit in the form of a reduction in domestic petroleum prices.