ISLAMABAD: Pakistan moved a step closer to sealing its loan deal with Russia as the team has arrived in Karachi to fine-tune the deal on crude oil with counterparts in Pakistan State Oil (PSO), a Pakistani English Daily reported citing a senior official privy to the development.
“This time, we are expecting all the hurdles will be removed in importing crude oil from Russia,” the official said. However, the Energy Ministry is tight-lipped over the mode of payment and discount on crude oil prices.
It should be noted that last month the technical teams of the Operational Services Centre (PSC) — a Russian state-owned entity — held talks for two days on March 21-22 with the PSO team, which ended without progress on the constitution of Special Purpose Vehicle (SPV) responsible not only for importing the crude but also for the payments.
“The Russian delegation is here now to finalise the government-to-government agreement, including the mode of payment. Russia is currently asking for payment in China’s Yuan or Ruble, but Pakistan wants to pay in rupee,” the report said.
According to inside sources, once the deal is done, Pakistan will place the order to Russia for crude oil purchase.
“The Russian ship will arrive in 26 days, most probably by mid-May. The current Brent price in the international market hovers at $85.16 per barrel whereas the Russian oil is available at $47-48 per barrel.”
At the same time, according to top officials, the State Bank of Pakistan (SBP) is asking some local banks, including the National Bank of Pakistan (NBP), to open letters of credit for importing Russian oil but they are hesitant to do so mainly because of the G7 countries’ regulations of following the price cap of $60 per barrel or below it and making the payments under Society for Worldwide Interbank Financial Telecommunications (SWIFT) arrangement.
