Business

Russian delegation in Pakistan to finalise oil import deal

Published

2 years ago

Farwa

Delegation is here to finalise agreement, including payment mode.
Once deal is done, Pakistan will place order for crude oil purchase.
Russian ship will arrive in 26 days, most probably by mid-May.

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), The News 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 official told the publication.

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.

The officials said that PSO had never imported crude oil as it only imports finished petroleum products from various sources and diesel from KPC (Kuwait Petroleum Company).

Refineries have been importing crude under long-term agreements from ADNOC and Saudi Aramco. But in the case of Russian crude, refineries will not be involved in the import, but it will be SPV with representatives from PSO and PSC.

“Pakistan may get Russian crude price with a discount close to $50 per barrel, $10 per barrel below the cap price imposed by G7 countries on Russian oil in the wake of the war on Ukraine,” relevant officials hinted.

However, one of the top guns in the coalition government said that the decision to import the Russian crude under the government-to-government agreement at a 30% discount may not provide the required relief as 26 days of transposition from the Russian port to Pakistan port will incur the per barrel shipping cost at $15 per barrel and $ 10 per barrel refining cost will erode the maximum discount.

On top of that, Pakistan refineries will only be able to extract just 10% MS out of Ural crude and 50% furnace oil.

The refineries are already facing the ullage of furnace oil. The only consumption of furnace oil in Pakistan depends upon running the RFO-based power plants.

The industrial sources suggest the government conduct a commercial analysis if the import of Russian oil will benefit Pakistan’s economy or not and, if yes, to what extent.

Business

SFD and Pakistan Sign Two Deals Totaling $1.61BLN

Published

1 day ago

Farwa

Two agreements totaling $1.61 billion have been inked by Pakistan and the Saudi Fund for Development to improve their bilateral economic cooperation.

Business

Saudi Arabia and Pakistan sign an MOU to strengthen their auditing industry collaboration.

Published

1 day ago

Farwa

A spokesperson for the office of the Auditor-General of Pakistan (AGP) announced on Monday that the two countries have signed a Memorandum of Understanding (MoU) to strengthen cooperation in public sector auditing through improved cooperation between audit institutions of both countries, as well as training programs and the exchange of trainers.

This comes as a group from Saudi Arabia’s General Court of Audit (GCA), headed by GCA President Dr. Hussam bin Abdulmohsen Alangari, arrived in Pakistan on Sunday for a four-day visit.

The agreement was signed during AGP Muhammad Ajmal Gondal’s meeting with the Saudi delegates, aiming to strengthen audit cooperation, enhance knowledge-sharing, and improve governance, transparency and accountability in government spending.

Public relations officer Muhammad Raza Irfan of the AGP’s office told Arab News that the deal will further advance bilateral collaboration between Saudi Arabia and Pakistan in addition to enhancing professional ties between the two nations’ auditing institutions.

In a statement released from his office, AGP Gondal was cited as saying, “This collaboration marks a significant step toward fostering international cooperation in auditing.”

“The exchange of ideas and methodologies will undoubtedly strengthen our capacity to meet emerging challenges and set new benchmarks for public accountability.”

Discussions at Monday’s meeting focused on fostering closer ties between the Supreme Audit Institutions (SAIs) of Pakistan and Saudi Arabia, sharing innovative audit methodologies, and planning collaborative initiatives for the future, according to the AGP office.

The two parties decided to increase their knowledge of theme, environmental, and impact audits as well as to exchange best practices in audit standards, performance audits, and citizen participation audits.

The statement added, “It also agreed to exchange trainers, address new auditing challenges, plan cooperative audits, including a performance audit on the oil and gas sector in 2025, and work together on training programs.”

Both sides reaffirmed their shared commitment to promoting transparency, accountability and excellence in public sector auditing.

Business

The government chooses to continue the PIA privatization process.

Published

1 day ago

Farwa

The Pakistan International Airlines (PIA) privatization process will be restarted by the federal government, and expressions of interest would be requested within the month. Officials stated that the Prime Minister’s Committee on Privatization will convene to make the final decision.

Usman Bajwa, the secretary of the Privatization Commission, gave a briefing on the updated procedure to the National Assembly Standing Committee on Privatization. Additionally, he disclosed that airlines other than PIA are now able to compete with regional carriers thanks to IMF-approved aircraft tax concessions.

Farooq Sattar, the chairman of the privatization committee, underlined the importance of giving PIA workers at least five years of job security. Employee protection will continue to be a top priority and will be resolved prior to bidding, the Privatization Commission promised.

PIA’s liabilities totaling Rs650 billion have already been assumed by the government, and an additional Rs45 billion in outstanding debts must be paid before the privatization process can begin. As of the now, PIA has assets around Rs155 billion and liabilities worth Rs200 billion. It will be necessary for the new buyer to expand the fleet by 15 to 20 aircraft.

Additionally, the Privatization Committee has sought a timeline for the privatization of Faisalabad, Gujranwala, and Islamabad Electric Supply Companies. Officials stated that after the appointment of a financial advisor, the privatization process for these companies will accelerate.