ISLAMABAD: A senior official from the Russian administration has denied the existence of a “special discount” on crude oil sales to Pakistan, according to an international media outlet report, while confirming that the two countries are conducting transactions without using United States dollars as the currency.
Pakistan announced the arrival of the first consignment of Russian crude oil, totaling 45,000 metric tons, on June 11. The development took place as Pakistan was actively seeking cheap energy sources to address a crippling economic crisis, which has resulted in a decline in its forex reserves and forced the government to reduce imports.
Energy products account for approximately 29 percent of Pakistan’s overall imports, making officials in Islamabad celebrate the acquisition of Russian crude oil at a discounted price since they hoped it would significantly reduce Pakistan’s import bill and create more fiscal space for the government.
Prime Minister Shehbaz Sharif described the arrival of Russian oil as a “transformative day” for his country, stating in a Twitter post that it marked “the beginning of a new relationship between Pakistan and the Russian Federation.”
“Oil deliveries to Pakistan have begun,” the Voice of America quoted Russian energy minister Nikolai Shulginov as saying during a media interaction on the sidelines of an international economic conference in St. Petersburg on Friday. “There is no special discount; for Pakistan, it is the same as for other buyers.”
Asked about the currency used to facilitate the crude oil sale amid reports that the two countries were using Chinese Yuan, he said: “We agreed that the payment would be made in the currencies of friendly countries.”
Shulginov also confirmed that the issue of barter supplies was discussed between the two countries, although no decision related to it had been made.
Pakistan’s petroleum minister, Musadik Malik, who played a key role in the crude oil deal with Russia, has consistently declined to disclose any commercial details.
To prevent Moscow from using oil revenue to finance its war against Ukraine, the United States and its allies have imposed a price cap of $60 per barrel on Russian petroleum products.
During a media briefing earlier in the week, a US State Department spokesperson mentioned that the Pakistani purchase was below the Washington-backed international price cap.
