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Islamabad: Cash-strapped Pakistan has placed its first order for discounted Russian crude oil, which is expected to arrive in the port city of Karachi next month, an official said on Thursday, a decision that may provide some relief to the people already hit by skyrocketing inflation.
Pakistan, which is currently grappling with high external debt and a weak local currency, is hopeful that snapping crude at discounted rates from Russia will stabilise oil prices in the country.
Petrol now costs a record Rs 282 per litre, following the revision announced by the government last week.
“We have placed our orders and the first consignment is expected to reach Karachi in May,” an official in Pakistan’s Ministry of Petroleum told PTI.
According to the deal, Pakistan will only import crude oil from Russia, and refine it through a local dealer.
The official didn’t provide details about the price at which the Russian crude would be imported.
The move is expected to provide some relief to the people already hit by double-digit inflation.
He, however, confirmed that it would have a positive impact on the supply side and stabilise prices.
In December last year, Russia refused to provide Pakistan with a 30 per cent discount on its crude after the Pakistani delegation asked for a reduction in price.
A Russian delegation arrived in Islamabad in January this year to hold talks and settle technical issues such as insurance and mortgage.
Energy accounts for the biggest share of Pakistan’s imports, and cheaper oil from Russia will help Pakistan in containing the ballooning trade deficit and balance-of-payments crisis.
Pakistan’s foreign exchange reserves have plummeted to USD 4 billion, the country’s central bank said last week.
The cataclysmic floods last year inundated a third of the country, displaced more than 33 million and caused economic damages to the tune of USD 12.5 billion to Pakistan’s already teetering economy.
Pakistan and the IMF have failed to reach a staff-level agreement on the much-needed USD 1.1 billion bailout package aimed at preventing the country from going bankrupt.
The funds are part of a USD 6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations.
This post was last modified on April 20, 2023 4:43 pm