Pakistan will pay for energy purchases from Russia, when they start in late March, in currencies of friendly countries, a top Russian energy ministry official said in Islamabad on Friday.
Russia’s Energy Minister Nikolay Shulginov, who is visiting the country for an annual inter-governmental commission, also said that the two countries had agreed on late March as the timeline for crude oil export to Pakistan.
The latest statement came after it was reported that Pakistan could secure crude oil deal with Russia on desired discount rate if Prime Minister Shehbaz Sharif contacts President Vladimir Putin.
In this connection, Minister of State for Petroleum Mussadik Malik confirmed the import of Russian oil from March and said Pakistan wanted to import 35 percent of the country’s total crude oil requirement from Russia.
However, the state minister noted that Russia currently did not have liquefied natural gas (LNG) for Pakistan.
Earlier, official sources were reported as saying, “The experts from Russia also asked Pakistan counterparts not to mention the price cap of $60 per barrel imposed on Russian oil by G7 countries while discussing the crude import.”
The Russian oil price in the international market currently hovers between $70-75 per barrel whereas Brent is priced at $81 per barrel. However, Pakistan hopes that it will get crude oil below $60 per barrel from Russia under the government-to-government mode.
Trade transaction for mutual benefit
After the completion of talks, Islamabad and Moscow also agreed that the oil and gas trade transaction would be structured in a way it has a mutual economic benefit for both countries after consensus on the technical specifications achieved.
As the eighth session of the Pakistan-Russia Inter-Governmental Commission on Trade, Economic, Scientific and Technical Cooperation concluded Friday, the two countries were in agreement to strengthen cooperation, enhance trade and broaden infrastructure investment based on strategic and favourable commercial terms in the energy sector.
Both sides have agreed to work on a “Comprehensive Plan for Energy Cooperation”, which would form the foundation for future work and is to be finalised in 2023, says a joint statement.
The Russian side was invited toward potential projects of the federal and provincial governments of Pakistan, including in public-private partnership mode and requested the Russian businessmen to explore these possibilities.
“Both sides have resolved the pending issues related to the exchange of information on certificates of origin of goods with the use of an electronic verification system and shall endeavour to finalise the above-mentioned protocols by the end of May 2023,” the joint statement read.
During the meetings held in the last three days, it was also decided that innovative ways of doing business, including barter trade, would be adopted and they also agreed to explore the option further.
“In the context of the desire of both parties to promote regional integration and Eurasian connectivity, the two sides agreed to share information towards developing and improving rail and road infrastructure,” the statement read.
Meanwhile, the two sides signed the following documents as well in this regard: agreement regarding cooperation and mutual assistance in custom matters; protocol on the exchange of documents and data on customs value of goods transported; and working agreement on the airworthiness of aeronautical products.
Putin views Pakistan as ‘key partner’
The Russian delegation led by Shulginov called on PM Shehbaz in Lahore and discussed cooperation in various fields to strengthen Pakistan-Russia relations.
In his message, Putin, referring to Pakistan as Russia’s important partner in South Asia and the Islamic world, reiterated his strong interest to deepen the bilateral relationship.
During the meeting on Thursday, both sides agreed on the importance of the energy sector for the development of bilateral economic and trade relations. In this regard, views were exchanged on supplying oil and gas from Russia to Pakistan on a long-term basis. Matters related to gas pipelines were also reviewed.
It’s developing story. Details to follow