Cheap Russian oil: Musadik claims private sector made hefty profits

ISLAMABAD: Minister for Petroleum, Dr. Musadik Masood Malik has reportedly accused private sector of earning huge profits on cheap Russian oil but its benefit is not being passed on to general public, well-informed sources told Business Recorder.

Petroleum Minister made this claim at a recent meeting convened by the Minister for Planning, Development and Special Initiatives, Ahsan Iqbal to finalise agenda for a high-level meeting in Moscow.

According to sources, Musadik Malik shared with the forum that the visit in December, 2022 transformed the bilateral relations primarily building on energy cooperation. However, he raised concerns that cheaper oil facility available from Russia could not be utilised for the benefit of general public and only private sector was earning huge profits. Therefore, government refineries need to use Russian oil for benefits of public.

Ahsan for comprehensive roadmap to cooperate with Russia

There are reports that the government is considering a further increase in crude Russian crude oil import at a discounted price. However, the authorities have not yet finalised the amount of enhanced quantity to be requested from Russia.

In July 2022, Pakistan’s five oil refineries had informed the government that the main problem with a deal with Moscow was that only up to 30 percent of Russian crude could be processed locally due to technical and operational constraints.

The refineries also shared their concerns over how payments would be made and how their LCs [letters of credit] would be processed as Russian banking channels are closed to international payments. Pakistan received its first shipment of Russian crude oil of 45,000 metric tons under the agreement signed between Islamabad and Moscow.

The sources said the government is giving final touches to all its proposals, to be shared with Moscow through diplomatic channels before the high level visit. Pakistan’s ambassador to Russia has also been directed to send his wish list to Islamabad so that it could be made part of final agenda.

Copyright Business Recorder, 2024