Business

Russian oil not likely to help reduce petrol price in Pakistan

Published

2 years ago

Farwa

Russian oil’s heavy, will produce 50% furnace oil: industry people.
PRL received first cargo of Russian oil of 45,000 tonnes last week.
Some suggest move to import this oil might be politically motivated.

KARACHI: Russian crude oil will produce more furnace oil (FO) than high-speed diesel (HSD), which would not reduce the prices of petroleum products domestically, The News learned Monday.

According to the oil industry players, the arrival of the first cargo of Russian crude oil has been celebrated from the top level of the government to the media.

However, the anticipated reduction in the prices of petroleum products, particularly diesel, and petrol, in the near future would not be possible.

Pakistan Refinery Limited (PRL) received the first cargo of Russian crude oil of 45,000 tonnes on Sunday, and its discharging from the vessel started on Monday.

“The complete discharge of this crude oil will take twenty to thirty hours,” the Karachi Port Trust stated.

On the other hand, the oil industry people believed that the much-talked-about Russian oil was being cherished as a significant achievement, despite its commercial viability not looking promising.

They pointed out that the Russian crude oil was heavy and would produce 50% furnace oil, 32% high-speed diesel, and 18% of the remaining products.

On the other hand, they pointed out that domestic refineries could extract 50% HSD and 25% furnace oil from Arabian crude oil.

They believed that Russian crude oil might disturb the economic pattern of petroleum products from crude oil, and for it to be more commercially viable, the oil price should be at a higher discounted level.

They said that the first Russian cargo was a trial. After its processing, the report of its refining would be forwarded to the government to determine its economic viability for the country.

According to them, the buying of Russian crude oil by the current government also seems to be an attempt to defuse the narrative of the former government of Pakistan Tehreek-e-Insaf (PTI), which continuously castigated the sitting government over dragging its feet from importing crude oil from Russia.

Industry people said that producing more furnace oil from this crude oil would further add to the existing stock of this fuel. Pakistan currently possesses huge stocks of FO in the range of hundreds of thousands of tonnes due to its non-lifting by the local power plants.

They said that Pakistani refineries have struggled to dispose of this massive stock after the power generation plants refused to stockpile FO.

Refineries also exported some of the stock to the international market at a lower price to keep the operations of their refineries running smoothly.

Business

E&P Companies Will Invest $5 Billion in Pakistan’s Petroleum Industry

Published

2 days ago

Farwa

Over the next three years, local and foreign companies involved in Pakistan’s oil and gas exploration and production sector have shown a strong desire to invest more than $5 billion in the nation’s energy sector.

Recent changes to the Petroleum Policy and the implementation of an exclusive tight gas policy, which provide better incentives and a more investor-friendly regulatory framework, are credited with the increase in investor confidence.

These strategic changes are expected to boost domestic energy production, open up new avenues for growth, and draw large amounts of both domestic and foreign investment.

Business

With inflation slowing, the SBP is anticipated to lower the policy rate for the eighth time in a row.

Published

2 days ago

Farwa

Businesspeople anticipate another reduction in the policy rate when the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) releases the updated rate.

The interest rate for the upcoming two months will be announced by the central bank. It is still unclear if the rate will stay the same or be lowered to reflect stakeholder expectations.

According to experts, the policy rate will be lowered in order to further boost the nation’s economic sector.

Interest rates may be lowered for the seventh time in a row if the inflation rate declines significantly more than anticipated.

In its last six sessions, the MPC had cut the policy rate by 10 percent. In January 2025, it decreased the rate by one percent to 12pc.

12PC POLICY RATE

In January, the State Bank of Pakistan (SBP) announced cut in key policy rate by 100 basis points (bps) to 12 percent from 13pc in line with expectations of the business community.

The policy rate, which had been at 22 percent since June 2024, was slashed by 1,000 basis points to 12 percent.

The SBP governor said the decision was taken with careful consideration. “Although inflation is expected to decline next month (February), core inflation remains a pressing concern,” he stated.

Ahmed highlighted strong remittance inflows and robust export growth as key factors supporting the current account.