Russia refuses to sell cheap oil to Pakistan

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Russia refuses to sell cheap oil to Pakistan
Oil production by Tatneft at the Romashkinskoye field. Genre photography. 27.07.2022 Russia, Tatarstan, Almetyevsk Photo credit: Gleb Schelkunov/Kommersant/Sipa USA(Sipa via AP Images)

Pakistan is now seeking 30-40% discounts on crude oil from Russia, and Russia is reportedly reluctant to offer crude stocks at such low prices.

Moscow has refused to cut Pakistani oil prices by 30-40%, saying the amount has already been set aside to manage outstanding payments from other buyers in the market.

Moscow visit

A delegation of Ph.D. Musadik Malik, Minister of State (Petroleum Division), Captain. (R) Mohammed Mahmoud, Chief of Staff for Petroleum Affairs, and other senior government officials arrived in Moscow this week to reach an agreement on the import of discounted fuel.

So far, talks have not been very clear for either side. However, the Russian side has provided assurances to the Pakistani side and will share their answers later through diplomatic channels.

cheap russian oil

It should be mentioned that Russian oil is cheaper than world oil prices and can be sorted in Pakistani refineries. Private refineries previously used Russian crude oil to produce their final products.

pakistan stream gas pipeline

The Russian side also called on Pakistan to first fulfill its commitment to the Pakistan Stream Gas Pipeline (PSGP) project. The project model under the GTG contract has already been finalized and some clauses of the Participation Agreement remain open. No long term plan
Pakistan currently has no long-term plans to ease its fuel shortage. Market reserves are rapidly running out due to increasing demand from other countries.

Significance of the Agreement for Pakistan

If energy projects with Russia go ahead, each deal could save the South Asian nation billions of dollars. Moreover, purchasing petroleum products from Moscow reduces the government’s foreign exchange reserves.

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