Musadik Malik reiterates Russia will provide Pakistan crude at ‘discounted rates'

State Minister for Petroleum Musadik Malik on Friday reiterated Russia will provide Pakistan crude oil at discounted rates.

Addressing a press conference, Malik said Russia would provide Pakistan crude at a discount, similar to what the energy giant is giving to other countries in the world.

“It (discount) could be greater than being given to others,” he added.

The remarks come a day after Foreign Minister Bilawal Bhutto-Zardari, during an interview with journalist Amna Nawaz on PBS Newshour, said: “As far as Russia is concerned, we aren’t pursuing or receiving any discounted energy, but we are facing an extremely difficult economic situation."

When asked about the $60-per-barrel cap imposed by the Group of Seven states and the European Union on Russian seaborne oil over Russia’s war in Ukraine, Bilawal added: “Up until now we actually haven’t received nor are we getting any oil from Russia."

“As far as discounted rates, no one is giving discounted rates for oil these days,” Bilawal also told reporters at the United Nations. “That’s not a reality. It is true that we’re actively pursuing ways and means to address the energy shortfalls and difficulties we’re facing in Pakistan.”

Russia to provide crude oil to Pakistan at discounted rates: Musadik Malik

Meanwhile, Malik, who had earlier this month stated that Russia will provide cheaper oil, on Friday shared that refineries in Pakistan could process Russian crude — Siberian Light and Ural Light. The ability of Pakistan's refineries to process Russian crude is being cited as a reason behind Islamabad's inability to purchase oil from Moscow.

“Pakistan Refinery Limited (PRL), owned by Pakistan State Oil (PSO), told us that they could utilise up to 50% light crude of Russian origin. Similarly, PARCO has told us that they could utilise up to 30% of Russian crude.

“Whereas, Cnergyico, the third largest oil refinery in the country, could not only process these two (Siberian Light and Ural Light) crudes but also heavy crudes as well.

“We will get these light crudes from Russia on a discount,” added Malik.

The state minister said discounts on finished products including diesel and petrol would also be negotiated with the Russian delegation, scheduled to visit Pakistan next year.

A Pakistan-Russia Inter-Governmental Commission (IGC) meeting is scheduled to be held in the second week of January. The Russian energy minister is expected to visit during the meeting.

Malik added that the government has also revived its relations with Turkmenistan on the TAPI project, which "could provide us with 1.3bcf of gas".

“A special strategic cell has been established in the Ministry to follow up these projects,” he said.

On liquid natural gas (LNG), Malik said the government is working with Azerbaijan on a gas purchase framework agreement, which is being drafted. “Under this framework, we would have a government-to-government level agreement with the State Oil Company of Azerbaijan Republic, largely known as SOCAR,” he said.

"SOCAR will provide us with distressed cargoes on a monthly basis, and the Government of Pakistan would have the option to purchase these cargoes at given rates or not. “This will help us increase our gas supply,” he said.

The minister said that SOCAR has already offered Pakistan LNG cargo for December 14. “However, we were unable to purchase it as both our terminals were not available,” he said.

The government also remains in talks with the UAE to reach an agreement, under which cargoes of diesel and petrol can be purchased.

“I want to reiterate that the policies of the current government are meant to alleviate hardships of poverty-ridden masses,” said Malik.

He said that despite a 10% annual decline in gas reserves, the government is providing more gas to its consumers in comparison to last year. ”We will have an additional cargo of gas in the coming months of January and February, in comparison to the same period in 2022,” he said.

“We are also bringing in 20,000 tons LPG in addition to facilitate our consumers."