It seems the word “discounted” is creating confusion as Minister of State Mussadik Malik on Friday again said the Russian officials had “clearly” told Pakistan that they would provide discounted oil at the same rates as other countries or even lower.

“We are taking talks [with Russia on crude oil] forward,” he told a press conference in Islamabad after Foreign Minister Bilawal Bhutto Zardari’s denial.

Bilawal on Thursday had said that Pakistan was not “pursuing or receiving” any discounted energy from Russia.

“But we do have energy insecurity. And we are exploring various avenues to expand our areas where we can get our energy from. Any energy that we receive from Russia will take a long time for us to develop,” he told PBS (Public Broadcasting Service) in an interview.

But a closer look at Mussadik’s latest statement seemingly solves the mystery if we also take into account the $60 cap imposed on the Russian oil by the EU and G7 nations. Now if Pakistan buys oil at a rate more than $60 per barrel than it will not please the Western nations.

Or maybe, Mussadik would be better to use the term “cheaper Russian oil” – for whatever reasons it is cheaper – to end this confusion.

He said that the Russian officials had “clearly” told Pakistan that they would provide discounted crude oil “at the same rates as other countries or even lower”, which means Russia would have to sell oil at S60 at maximum, which can be translated as “discounted” for whatever reasons it is necessary/

Earlier, Finance Minister Ishaq Dar had also stated that Islamabad was looking at purchasing oil from Russia on a discounted rate and he had discussed the matter with officials from the US State Department back in October.

The US officials had told him that a G7 pricing committee was being set up for Russian oil products and that there would be a price cap, he added. “(They said) you shouldn’t buy (oil) for above that, and I agreed.”

Later, the EU and G-7 ensured imposing a $60 per barrel price cap on the Russian oil as the West tries to reduce the income sources of Moscow in response to invasion of Ukraine.

During the press conference on Friday, Mussadik, who was responding to a series of questions on the subject, said he didn’t see Bilawal’s statement.

He said Russia had eight different types of crude oil of which two could be used by refineries in Pakistan. “Before leaving for Russia, we met [officials of these] refineries. PRL (Pakistan Refinery Ltd) informed us that it can use up to 50 percent light crude oil of Russian origin.

“Parco (Pak-Arab Refinery Limited) said it can use up to 30 percent. And Cnergyico said not only can it use the two light crude oils but also the other six crude oils.”

Malik said that as per the team’s discussions with Russian officials, Pakistan would be provided light crude oils at discounted rates which would reduce energy prices in the country.

Russia also said it would provide finished products — petrol and diesel — the rates of which would be decided when the Russian team visited Pakistan, he added.

“When the energy cost goes down, the cost of transport and manufacturing will go down … consequently, the price of every item in a shop will go down. This is the prime minister’s vision.”

In addition, Pakistan was about to sign a trade agreement with Azerbaijan on LNG after which Pakistan would have the capacity to buy any distressed cargo throughout the world at cheap rates.

Malik said a “special strategic cell” had been set up at his ministry that would be responsible for ensuring implementation of any agreements. “A meeting of a [Pak-Russia] inter-governmental commission (IGC) has been proposed to be held in the second week of January.

“Russia’s energy minister is heading the commission. The minutes of our [previous] meeting will be presented. Our strategic cell is making efforts to fulfill all requirements so we can start getting crude oil by the end of the first quarter.”

The minister of state said Pakistan was also trying to sign a government-to-agreement with the United Arab Emirates through which Pakistan would get finished petroleum products.


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