ISLAMABAD: Pakistan and Russia have reached a long-term understanding in purchase of crude oil to offset rising prices of fuel in Pakistan, according to sources in the Petroleum Division.
Under this arrangement, a commercial cargo of crude oil from Russia will reach Karachi in December this year.
Under the agreement, local refineries will purchase crude oil directly from Russia and after a regular supply the two governments will sign a deal.
The cargo ship expected to arrive in December will be carrying about 1,000 matric tonnes crude oil.
It may be recalled that the coalition PDM government had in May this year stated that it wanted to import one-third of the country’s total crude oil requirements from Russia. The statement had come when the first cargo ship carrying Russian crude oil was arriving in Karachi.
The government wanted to open an energy corridor with Central Asia like the one we have with Gulf countries; a minister had stated.
This would reduce the cost of energy in the country and would be helpful in the development of industrial clusters and value additions in the agriculture sector.
The minister said the government’s objective was to import 18-20% of its total crude oil imports from Russia, with the hope that this move will substantially lower petroleum product prices for domestic consumers.
However, Pakistan soon suspended its import of crude oil from Russia after the refining process yielded more furnace oil than petrol.
Moreover, Pakistan Refinery had refused to process more Russian oil, as it yielded less petrol with 20% more furnace oil than Arabian crude oil.
Officials said that the benefits of importing Russian crude oil were limited, with a larger quantity of export of furnace oil at a lower price.
They claimed that Russian oil had yielded less kerosene and jet fuel for ships, which was not beneficial for the country.
Moreover, according to industry sources, Pakistan Refinery had given up refining Russian oil for now, despite the insistence of former state minister for petroleum Musadik Malik.
Two crude oil ships from Russia had arrived at the Karachi Port on June 11 and 26, after which no Russian oil ship came to Pakistan.
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