By: Asem Mustafa Awan
Minister of State for Petroleum Musadik Malik has reported receiving cheap oil and diesel from Russia and receiving a donation of high-value liquefied gas from Iran that can turn the tides for Pakistan.
Pakistani delegation’s visit to Russia was a success and the team had meaningful dialogue with Russian public and private LNG companies.
The Russian delegation wants to discuss the possibility of constructing a gas pipeline with Pakistan next month. The information from Dr. Musadik divulge that Russia and Iran want to increase trade relations with Pakistan.
Considering Pakistan’s economic difficulties and energy needs, trade relations with both countries fulfill a bilateral need and all effort to strengthen bilateral relations in energy and food sector should be welcomed.
With a 12 percent market share, Russia is one of the largest oil producers. About half of Russia’s oil and condensate exports go to Europe. China is Russia’s largest crude oil importer, accounting for about a third of Russian oil exports. Russia’s 1.5 million (Barrels Per Day) Druzhba pipeline supplies Russian oil via Belarus and Ukraine to European refineries in Poland, Germany, the Czech Republic, Hungary and Slovakia, which have been affected by the recent Russia-Ukraine war. China’s purchases of Russian oil have fluctuated this year, falling at the start of Russia’s invasion of Ukraine in February but then picking up significantly in the following months. After the war with Ukraine and global sanctions, Russia is selling oil at discounted prices. In March this year, the combined oil imports of China and India from Russia surpassed the oil imports from the 27 member states of the European Union. Sri Lanka, which is suffering from severe economic crisis, has also bought oil from Russia at discounted rates.
Pakistan meets its oil needs from the Arab market. Saudi Arabia and United Arab Emirates helped Pakistan many times during difficult times, but due to high prices in the international market, it is becoming difficult for Pakistan to pay the oil bill.
Russian oil is available at a low price of twenty dollars from the world market. If Pakistan imports this oil, the economy can get a boost. Iran has also offered to give huge amount of gas to Pakistan free of cost.
Like Russia, Iran is also providing energy at discounted rates to needy countries to improve its political and diplomatic alignment. The gas pipeline with Iran is awaiting completion for the stipulated period. Discussions on the project began in 1995 and a preliminary agreement was signed. Under the agreement, a pipeline was to be constructed from South Fars gas field to Karachi in Pakistan. Pakistani section of the pipeline was inaugurated by President of Pakistan Asif Ali Zardari and President of Iran Mahmoud Ahmadinejad. The delay as always in Pakistan is because of the official rigmaroles. Getting oil and gas from Russia and Iran is in the interest of Pakistan, it is good that the PDM government finally recognized the importance of PTI era decisions.