Russian crude oil will generate more furnace oil (FO) than high-speed diesel (HSD), resulting in domestic petroleum product prices remaining unchanged.
According to oil sector participants, the arrival of the first cargo of Russian crude oil has been hailed at all levels of government, from the top to the media.
However, the predicted price reductions in petroleum products, particularly diesel, and petrol, would be impossible to achieve in the near future.
On Sunday, Pakistan Refinery Limited (PRL) received its first cargo of 45,000 tonnes of Russian crude oil, and unloading from the vessel began on Monday.
“The complete discharge of this crude oil will take twenty to thirty hours,” according to the Karachi Port Trust.
On the other side, people in the oil sector believed that the much-talked-about Russian oil was being celebrated as a big success, despite the fact that its commercial viability did not appear promising.
They stated that the heavy Russian crude oil would yield 50% boiler oil, 32% high-speed diesel, and 18% of the remaining products.
They claimed, on the other hand, that domestic refineries could extract 50% HSD and 25% boiler oil from Arabian crude oil.
They felt that Russian crude oil would disrupt the economic pattern of petroleum products derived from crude oil and that in order for it to be more financially feasible, the oil price should be reduced more.
They said the first Russian cargo was a test. After processing, the refining report would be given to the government to establish the country’s economic sustainability.
According to them, the current government’s purchase of Russian crude oil appears to be an attempt to defuse the narrative of the former government of Pakistan Tehreek-e-Insaf (PTI), which repeatedly chastised the sitting government for dragging its feet on importing crude oil from Russia.
According to industry sources, manufacturing more furnace oil from this crude oil would add to the existing stock of this fuel. Due to non-lifting by local power plants, Pakistan now has large inventories of FO in the hundreds of thousands of tonnes.
According to them, Pakistani refineries have struggled to dispose of this enormous supply after power stations declined to store FO.
To keep their refineries working efficiently, refineries often exported some of the stock to the worldwide market at a cheaper price.