ISLAMABAD: The government said on Saturday it was trying to work out modalities with Russian authorities to ensure crude oil import on discounted rates to fulfil the country’s growing energy needs amid declining foreign exchange reserves and increasing current account deficit.
Pakistan has been striving to clinch a favorable deal from Russia for an uninterrupted crude oil supply to cut down its whopping import bill of gas and petroleum products which surpassed $23 billion during the last financial year.
The South Asian nation’s energy woes have also been worsened due to the Russian invasion of Ukraine amid the global supply crisis.
“We have been working on the modalities of supply of discounted crude oil with Russian authorities and hope the initiative will mature as early as possible,” Shahbaz Tahir Nadeem, a joint-secretary at the Petroleum Division, told Arab News.
He said the officials on both the sides held a virtual meeting on Thursday to discuss the issues related to crude oil import while noting “it is an ongoing process.”
During the meeting, the Pakistani side was led by State Minister for Petroleum Dr. Musadik Malik with top oil sector officials while the Russian side had senior energy ministry officials and other representatives of relevant departments.
Russian authorities have reportedly offered to supply blended crude oil to Pakistan of up to 100,000 barrels per day while the Pakistani officials also requested them for supply of liquefied natural gas (LNG) and investment in related infrastructure.
“We are expecting a Russian delegation in Pakistan in January for detailed deliberations on all these things,” the joint-secretary said. “I can confirm to you the negotiations are moving ahead smoothly and both the sides are keen to sign the agreements.”
The Pakistan government initiated negotiations with Russia for the supply of crude oil and gas in November when a high-level team led by the petroleum minister visited Moscow and held detailed meetings with different Russian companies and officials.
Pakistan has remained unable to procure LNG from international market as spot prices remain out of its range and shipments under long-term deals remain insufficient to match the rising demand. With dwindling local gas reserves, the country has begun to ration supplies to residential and commercial consumers.
Energy experts have called on the government to invest in natural resources to generate wind, hydro and solar energy to meet its growing requirements instead of importing dirty fuel on exorbitant rates from countries like Russia.
“The crude oil and gas import from Russia on a proposed discounted rate could be a short-term solution to Pakistan’s energy woes, but in the longer run the country will have to rely on its indigenous resources,” Mustafa Amjad, an energy expert with an Islamabad-based think-tank Renewables First, told Arab News.
“We need to invest in our renewable resources like solar and wind to become self-sufficient in energy since this will also help us fulfil our international commitments related to reduction of carbon emissions,” he added.