ISLAMABAD: Weeks after receiving the first shipment of crude oil from Russia, Pakistan has decided to suspend imports of the commodity purportedly due to limited benefits, while negotiating a long-term agreement on “discounted rates”, sources have said.
The first cargo of imported crude oil had arrived in Karachi in June after months-long discussions and announcements, with former governments — both of the Pakistan Tehreek-e-Insaf (PTI) as well as the Pakistan Democratic Movement (PDM) — claiming many benefits.
Sources informed Profit that according to the Karachi Port Trust, a second shipment has also been delivered. However, Pakistan has seen limited benefits of the imports, purportedly due to a higher furnace oil yield, they added.
Former minister of state for petroleum Musadik Malik had also said in a press conference on August 9, 2023, that the impact of Russian crude imports was yet to be determined.
The government had announced plans to fulfil two-thirds of the country’s oil needs by importing 100,000 barrels per day (bpd) of Russian crude. However, the gains have been limited so far, according to officials and analysts, because of shipping costs, a foreign currency shortage — Pakistan paid for the first shipment in Chinese yuan — and lower quality refined products compared to those extracted from barrels received from main suppliers Saudi Arabia and the United Arab Emirates.
The information about the suspension comes shortly after reports that the Pakistan Refinery Limited (PRL) — which was tasked with refining the Russian supply in a trial run — had raised concerns about whether it had the capacity to process more quantities of Russian crude.
However, just a day later, the PRL denied the reports, saying in a press release that it would again process Russian crude “when available at favourable commercial terms”.
Sources said the suspension is only temporary, and Pakistan could restart imports if Russia offered “special discounts”.
When approached for a comment, the Petroleum Division’s secretary denied reports that imports of Russian crude oil had stopped and that benefits were “very limited”.
“Previously [delivered] shipment was a test cargo, and now we are working on an agreement, which takes time,” the secretary said.