Ahsan Iqbal, Minister for Planning, Development, and Special Initiatives, responded to the question in a recent interview with Voice of America (Urdu). With all the buzz around Russian oil, every Pakistani is wondering what impact imported oil will have on the country’s high fuel prices.
When asked if the price of fuel, which had hit a record high of Rs282 per litre and is now at Rs272 per litre, would be reduced by Rs100 once Russian oil arrived in Pakistan, the minister said no. “There might not be a statistically significant difference,” he remarked. However, once Pakistan began purchasing huge quantities of Russian oil, the price would “definitely fall,” he added.
“At first, the amount of imported oil is small, but as it grows over the next six months to a year, it will help reduce petrol prices,” Iqbal added. Before reaching an agreement in April, Pakistan and Russia had been discussing an oil contract for months.
The first shipment of Russian oil is likely to arrive at the Karachi port in late May, according to State Minister for Petroleum Mussadik Malik. If the initial transaction went well, the country would like to import 100,000 barrels per day (bpd) of Russian crude oil, he said.
Initially, the crude oil would be refined in a trial run by Pakistan Refinery Limited (PRL), followed by Pak-Arab Refinery Limited (PARCO) and other refineries. The state minister announced that the government has negotiated a comprehensive energy security agreement with Russia that would cover many areas of the country’s energy supply.
“We want to open an energy corridor with Central Asia similar to the one we have with Gulf countries,” Malik said. “This would lower the country’s energy prices and aid in the development of industrial clusters and value additions in the agriculture sector,” he said.
The minister said that the government’s goal is to buy 18-20% of its total crude oil imports from Russia, with the aim that this step will significantly cut domestic petroleum product costs.