Prices of petroleum products likely to slash by up to Rs40

ISLAMABAD: With the arrival of Russian crude oil, prices of petroleum product are likely to decrease in Pakistan from July 1.

Sources at the petroleum ministry said that the prices of petrol and diesel were likely to decrease by up to Rs40 per liter from July 1.

According to the sources, the unloading and storage of imported Russian crude oil is currently under way at Karachi port.

An initial agreement has been reached between Pakistan and Russia for the import of 100,000 barrels of oil. Under the agreement, Pakistan will receive 700,000 barrels of oil in the future.

The Russian oil will be refined in the Pak-Arab Refinery (PARCO), sources said. Russian oil will be available in the market for sale within the next two weeks, the sources said.

Meanwhile, Petroleum Minister Musadik Malik has said that Pakistan paid for its first government-to-government import of discounted Russian crude oil in Chinese currency, a significant shift in its US dollar-dominated export and import payments policy.

Discounted crude offers a respite as Pakistan faces an economic crisis with an acute balance of payments problem, risking a default on its external debt. The foreign exchange reserves held by the State Bank of Pakistan are scarcely enough to cover a month of controlled imports.

The first cargo of discounted Russian crude oil arranged under a deal struck between Islamabad and Moscow earlier this year arrived in Karachi on Sunday. It is currently being offloaded at the port in the southern city of Karachi.

Musadik Malik, speaking to Reuters by telephone, did not disclose the commercial details of the deal, including pricing or the discount that Pakistan received, but said, the “payment (was) made in RMB)”.

He said the purchase, Pakistan’s first government-to-government (G2G) deal with Russia, consisted of 100,000 tonnes, of which 45,000 tonnes had docked at Karachi port and the rest was on its way. Pakistan made the purchase back in April.

About its grade, he said, it is Urals, adding this is one of the lighter crudes available.

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