Story highlights:

• Russia will give crude oil, petrol, diesel at discounted rates. Similar to the one given to any other country
• Talks start with private sector for LNG
• Talks begin with government companies for long term contracts of LNG
• Progress made on pipeline project. Pakistan has set a deadline.
• Inter-governmental delegation of Russia will visit Pakistan in January
• Iran has decided to donate £2m of LPG to Pakistan. It will reach Pakistan in next 10 days

Russia has agreed to provide crude oil, petrol, and diesel to Pakistan, in principle, at discounted rates, announced the country’s petroleum minister after taking a trip to the energy-rich country.

“Our Russia visit was more successful than our expectations,” Minister of State for Petroleum Musadiq Malik said while briefing the media about the outcome of his trip to the country last week. “The same discount anyone else is getting in the world.”

The trip had come as the nation struggles to meet domestic gas supply needs as winter approaches while battling to contain a current account deficit swelled by energy payments, mostly for oil.

Finance Minister Ishaq Dar last month said that the country was considering buying discounted Russian oil, pointing out that neighbour India has been purchasing oil from Moscow and Islamabad also has a right to explore the possibility.

“The government has authorised the Ministry of Petroleum, and on Monday, our team will leave for Russia for negotiations,” Dar said in an interview with a private TV channel on November 25.

Malik started his press conference by taking a jibe at reporters who as per sources reported that Pakistan’s trip to Russia was not successful.

Pakistan’s energy imports have the biggest share in the country’s import basket accounting for over quarter of total inward shipments.

Even 2/3 of the requests which I have presented in front of you. Then what will happen? Energy prices will go down, inflation will go down, people will get relief, when will go to the election, God will give us success If we import cheap Russian oil, it would reduce pressure on our current account. This would reduce pressure on the exchange rate. Petrol prices could come down.

When the government spoke with the government companies of Russia, Malik said that they did not have Liquified Natural Gas (LNG) due to the increased pressure. “You all know that till last year, we thought that there is a thing like global fabric under which the whole world called for going green which means the countries needed to invest in renewable energy and when the supply was disrupted they opened their coal factories and they bought the LNG of the whole world. But, Pakistan could not buy at rates at which they bought.”

The Russian government is setting up new factories for the production of LNG and they have invited Pakistan to begin talks on long-term contracts for 2025 and 2026

In view of such a situation and following all the international regulations, the country decided to move ahead and address the energy crisis.

He added that Pakistan has started talks with private companies, part of their delegation, for LNG that were organised by the Kremlin. “The Russian government is setting up new factories for the production of LNG and they have invited Pakistan to begin talks on long-term contracts for 2025 and 2026,” the minister said.

Efforts would be made to sign new deals on a government-to-government level like the one Pakistah has signed with Qatar.

“We had many discussions on pipeline on which they had much interest,” he said. The minister avoided to comment on old agreements with Russia.

Iran has decided to donate £2 million of liquefied petroleum gas (LPG) to Pakistan on a humanitarian assistance

According to Malik, there were good negotiations on such agreements and the country has asked Moscow to show some flexibility as Pakistan has some constraints.

He spoke about the Pakistan stream, North-South, pipeline and a mega gas pipeline project when international conditions are met.

An inter-governmental delegation of Russia will visit Pakistan in January, Malik said, adding that Pakistan would try to finalise it for an agreement or an executive summary.

8% to 9% of gas depletion in Pakistan every year

Pakistan is facing 8% to 9% of gas depletion every year from its own reserves, Malik said. Similar sort of statistics shared by former information minister Fawad Chaudhry in 2021, warning that Pakistan might have no gas in a few years.

Malik claimed that the government more gas as compared to last year in November. Same status is with the current month and January. The government has asked companies to do this:

• Provide gas from 6am to 9am at the time of breakfast
• Provide gas from 12pm to 2pm at the time of lunch
• Provide gas from 6pm to 9pm at the time of dinner

The government was providing more gas service as compared to the past, adding that it was monitoring the situation.

“Pakistan has some infrastructure problems,” Malik said and companies have asked to imporve it. The areas without gas utility were being given LPG.

As many as 20 companies were importing more than 20,000 ton gas every month to increase distribution.

Iran to provide £2 million of LPG

The minister also said that Iran has decided to donate £2 million of liquefied petroleum gas (LPG) to Pakistan on a humanitarian assistance and negotiations with the neighbouring country had been completed.

“It will reach the country within the next 10 days,” he said so that arrangements are made in extreme winter. He clarified that the additional LPG has no link to any pipeline.

He was of the view that such a deal would be beneficial for the people and set the ground for the government in next elections.

“In the coming days, I will tell you our engagements with Azerbaijan, Turkmenistan, and Kazakhstan,” he said.

“There has been clout that the government is non-serious about agreements,” he said in response to deals after the coalition government came to power. “Elections will be held when the prime minister wants.”