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Wednesday April 17, 2024

P&I Club probes PNSC’s compliance with Russian oil price cap scheme

By Tanveer Malik
February 18, 2024
Pure Point, the vessel in which Russian oil reached Pakistan, can be seen anchored at a dock in Karachi, on July 12, 2023, in this still taken from a video. — X/@Roohan_Ahmed
Pure Point, the vessel in which Russian oil reached Pakistan, can be seen anchored at a dock in Karachi, on July 12, 2023, in this still taken from a video. — X/@Roohan_Ahmed

ISLAMABAD: A global maritime insurance body has asked Pakistan National Shipping Corporation (PNSC) to submit a report on how it complies with the price cap scheme imposed by the European Union (EU) and G7 on Russian oil, officials told The News on Saturday.

The Protection & Indemnity (P&I) Club, which provides cover for open-ended risks such as cargo damage, war risk and environmental damage, said in a letter to Lahore Shipping (Pvt) Limited, a subsidiary of Pakistan National Shipping Corporation, that it needed to see its internal procedures and compliance manual on the scheme.

The letter said that the "assured is required to provide it copy of its internal procedures on compliance with the restrictions and requirements adopted by EU/G7 and other nations that may from time to time adopt EU/G7 Price Cap Scheme".

Global body has sought the names, titles and business units of the persons responsible for the implementation of its compliance programme and copy of its compliance manual and any trading material.

The scheme, adopted by the EU and G7 in response to the Russian-Ukrainian conflict, limits the price that shippers and tanker charterers can pay for Russian crude and oil products to prevent Moscow from profiting from its aggression.

PNSC, which transports dry bulk and liquid cargoes globally, is one of the few Pakistani companies that deal with Russian oil, an official said.

He said PNSC had not violated the scheme and was cooperating with the P&I Club, which operates as a mutual insurance association for its members, including shipowners, charterers, freight forwarders and warehouse operators.

"We have nothing to hide. We are following the rules and regulations of the international community. We will submit the report as soon as possible," he said.

Russian and Ukraine war led to sanctions on Russia and its trade.

As the cheap Russian crude was making inroads in various parts of the country, the sword of sanctions fell on it particularly.

Under the rules of G/7, shippers and tanker charterers are required to declare they paid no more than $60/b to lift Russian crude cargoes.

Higher price caps are also in place for Russian oil product exports.

Pakistan has imported 300,000 tonnes of Russian oil since June 2023, though the PNSC was not the cargo carrier.