In a major breakthrough for the country’s energy needs, Pakistan has signed a long-term deal to buy Russian oil, sources said on Thursday.

The sources added that the agreement was made on commercial basis which will allow privately-owned local refineries to buy the oil directly.

The first commercial cargo from Russia, expected to be 100,000 metric tonnes will arrive in Pakistan in December.

Once the supply becomes regular, a government-to-government agreement could be signed.

Russia will provide the oil on Pakistani ports and the price will be fixed at $60 per barrel. Reports said that the price was fixed in view of the price for Russian oil fixed by the G7 countries.

Even with costs and premiums applied, the Russian oil is expected to be $10/barrel cheaper than if bought from the international market. Pakistan also reportedly saved $40 million in the test cargo.