Former Pakistan Energy Minister Hammad Azhar shared a government letter written to the Russian Energy Minister on the social networking site Twitter a few days ago, proposing to import crude oil, diesel, and petrol from Russia at concessional rates.
Hammad Azhar has issued this official letter after the statement of the current Energy Minister Khurram Dastgir, in which he said that the previous government had not made any such official contact with Russia, in which the import of petroleum products at concessional rates from Russia. has been talked about.
After the release of the official letter of Hammad Azhar, a debate has started on social media, in which apart from the general public, a senior journalist of economic affairs Khurram Hussain has also questioned Hammad Azhar whether after this letter, the government level from Russia. But some such reply had come in which it was promised to provide oil at concessional rates.
In response to Hammad Azhar's tweet, Khurram Hussain wrote that there was no sign of any progress from Russia in which it was going to give oil at concessional rates to Pakistan.
Speaking to the BBC, Hammad Azhar said that the letter was written at the request of Russia, because Russia is looking for buyers to supply oil at 30 percent lower rates and because Pakistan is a major importer of oil products. Russia also wants to sell oil to Pakistan.
In Hammad Azhar's official letter about Pakistan's import of cheap oil from Russia, Pakistan's Energy Ministry while talking to BBC confirmed that while the former Energy Minister has released the official letter, it means that Pakistan Such a letter has been written on behalf of
However, a spokesman for the Ministry of Energy said that so far no such reply has been received from Russia, in which anything has been said about the import of cheap oil from Pakistan.
Pakistan is currently facing the problem of oil prices. The previous government at the end of February had announced a moratorium on increasing the prices of petrol and diesel until the budget of the new financial year, which the new coalition government has maintained so far. However, due to the lack of increase in prices, the government has to give subsidies of billions of rupees, which is harming the country's exchequer.
Due to the oil subsidy, talks are not taking place with Pakistan's IMF (International Monitoring Fund), which wants to end this subsidy before resuming the loan program.
Official letter suggesting cheap oil from Russia?
The official letter issued by former Energy Minister Hammad Azhar was written nine days before the fall of the PTI government and talks about the backdrop of trade ties between the two countries after former Prime Minister Imran Khan visits Russia. , that Pakistan is interested in importing crude oil, petrol, and diesel from Russia at cheap rates.
In this letter, Hammad Azhar wrote to his Russian counterpart to provide details of Russian officials who would further discuss the matter on behalf of Russian institutions.
Hammad Azhar wrote about the finalization of a deal on the matter in the next month, that is, in April. Hammad Azhar wrote in his tweet that the PTI government had planned to buy the first goods in April.
Hammad Azhar told BBC News, that "when the matter progressed after the former prime minister visited Russia, we talked about buying oil and gas and Russia showed great interest in that."
He further said that a few weeks later Pakistan's ambassador to Russia wrote that Russian officials wanted Pakistan to take forward the matter, after which I formally wrote this letter to the Russian Energy Minister, but he said that his letter A few days after this was written, the assembly was dissolved and then the PTI government came to an end.
Speaking to the BBC, Energy Ministry spokesman Zakaria Ali Shah said that the letter was sent to Russia through diplomatic bags, but he said that so far no response has been received from Russia.
When asked whether there was a plan to bring a cargo of oil in April as per Hammad Azhar's tweet, he said that the letter was written in the last days of March and it is not possible that the cargo will reach so soon under this deal. Go.
Is it possible to import cheap oil from Russia?
According to the former Energy Minister, there was a plan to import oil from Russia at concessional rates. Talking to BBC about this, senior economic journalist Khurram Hussain said that India imports oil from Russia, but it accounts for ten to twelve percent of India's energy needs and it is being imported from Russia for a long time.
But if Pakistan imports oil from Russia, there are some questions about the viability of the project, which need answers. For example, is it possible to ship oil from Russia to Pakistan and will the banks be ready to finance the purchase of oil from Russia?
Khurram Hussain said that Imran Khan is taking advantage of this and he talks about an independent foreign policy, one aspect of which is his announcement to import cheap oil from Russia. But according to Khurram, his announcement is not based on truth.
In this regard, Hammad Azhar said that Russia wants to attract international buyers by giving 30 percent cheaper oil and because Pakistan is a major importer of oil products, it wanted to sell this oil to Pakistan at concessional rates. Hammad said that this cargo was to be purchased in April following the plan.
However, a Finance Ministry spokesman said the plan to import oil from Russia was possible and said that the objective of every government, including the Ministry of Energy, is to work in the interest of the country and the nation. He said that the option of importing oil from Russia is also being considered and the new government has also been informed in this regard.
Will Pakistani refineries be able to produce products from Russian crude?
By importing Russian crude oil to Pakistan, can it be used to produce products in Pakistani refineries? In response to this, the people of the Pakistan Refinery Sector say that this can happen.
Zahid Mir, an oil sector expert, and chief executive of Pakistan Refinery, told the BBC that Russian crude could be used at local refineries. He said that Russia produces two types of crude oil, one Sokol and the other Ural.
He said that both types of oil can be used and oil products can be made from them, but according to him Socol is preferable which produces less French oil.
Zahid Mir said that at present, different crude oils are being used in different refineries in Pakistan, which include Arab Light crude oil along with Arab Extra, Kuwait Super, and one or two other types of crude oil.
Zahid Mir said that the refineries can process Russian crude oil in the same way as they are processing crude oil from other countries.
Can Russian Oil Lower Local Prices in Pakistan?
At present, the prices of petrol and diesel in Pakistan are a big problem for the country's economy and the new government. The former government claims that local consumers will benefit from getting cheaper oil from Russia.
According to the former Prime Minister's announcement on February 28, 2022, there was a ban on increasing the prices of petrol and diesel till the budget of the new financial year, and the difference due to rising prices in the global market was paid by the government to its coffers. was announced to.
The number of subsidies given on oil in March was more than 33 billion rupees, which has increased to 60 billion rupees due to the increase in global prices in April.
According to the documents of the Ministry of Energy, the amount of this subsidy will reach Rs 118 billion in May.
According to official figures, in the first nine months of this year, Pakistan imported petroleum products worth about $15 billion, which is 100 percent more than the same period last year. Although there has been some increase in the volume of imports, the amount of imports has increased substantially due to the increase in the global oil prices.
To reduce the country's growing fiscal deficit and restart the loan program, the IMF wants to end the subsidy on petrol and diesel prices, but the current government has not taken any decision on it yet.
Talking about the reduction in product prices in Pakistan due to the import of Russian crude oil, Zahid Mir said that it is not that easy, as the crude oil is not bought by the Government of Pakistan but the refineries buy it from the world market.
He said that the government only decides the price and this price in the local market is fixed based on the global prices of petrol and diesel. When the government decides the price, it is decided based on global prices of petrol and diesel and not based on crude oil price.
He said that if crude oil comes from Russia at concessional prices, then this government will have to change the formula for fixing the price.
"If consumers are to take advantage of crude oil coming from Russia, it will save the government in dollars by buying cheaper crude oil, but when the diesel and petrol products made from it are determined at their global prices, then for that The government will also have to give subsidy like this, but its amount will not be so much because crude oil will be available at concessional rates.
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