ISLAMABAD: An online meeting between Russian Ministry of Energy and Minister of State for Petroleum along with other public and private stakeholders was held on Thursday, sources privy to the development informed Profit.
The agenda of this online video meeting was the import of energy related products from Russia. According to the sources, the meeting discussed shipping, insurance matters and financial arrangements for imports from Russia.
All senior stakeholders in the energy sector from both the government and state owned enterprises participated in the meeting.
The online video meeting also discussed the agenda of the Pakistan-Russia Intergovernmental Commission (IGC) to be held in Pakistan on 19th and 20th January, 2023.
Profit was also told by sources that the Russian Energy Minister is expected to be a part of the delegation expected to visit in January.
An IGC is essentially a body made up of main and permanent secretaries from member states that is in charge of creating development programmes and action plans.
On the condition of anonymity the source shared that Russia has already shown willingness to offer crude oil to Pakistan at a 30% discounted rate.
If this is actually the case then Pakistan is getting a very sweet deal. The price of Urals oil as of Tuesday stood at 54.42$/barrel according to oilprice.com this would mean Pakistan would get a discount of 16$ per barrel, which is a lot depending upon the volume.
As the Urals blend of Russia is currently trading below the price cap of 60$/barrel imposed by western nations, it is plausible to get a ship and the supporting financial and insurance services without too much difficulty.
This said, the Urals blend is a heavier oil which means it has a higher density and is much more difficult to process if the refinery does not have the necessary machinery.
It has been reported that during the virtual meeting Pakistani authorities have also highlighted this fact to their Russian counterparts.
Informing them that domestic refineries are only able to process light crude oil which is generally more expensive since it’s easier to process.
Therefore blending in heavy and light oil would increase the price per barrel potentially higher than the price cap imposed by western nations and their allies.
Earlier in the month reports suggested that Russia had confirmed to the Pakistani delegation led by Minister of State for Petroleum Musadik Malik about the availability of 100,000 barrels per day crude oil supply to Pakistan.
A delegation from Moscow that is likely to visit Islamabad in January will iron out the finer details of the deal, including rates and mode of payment.
During a press conference held earlier this month, Minister of State for Petroleum Musadik Malik also said that Russia had confirmed the supply of petroleum products at a “discounted rate”.
The minister also expressed that fruitful discussions were held on pipeline projects in particular the delayed Pakistan Stream Gas Pipeline.
