A technical delegation from Russia will meet with Pakistan State Oil (PSO) representatives in Karachi on Tuesday to finalize a government-to-government (GtG) agreement on the import of crude oil, The News reported.
The official, who spoke on the condition of anonymity, stated that if the negotiations go well, both of the state-owned nominated businesses will sign the commercial agreement the following day (March 22).
PSO has been designated as the state-owned firm to represent Pakistan in the negotiations and signing of the agreement to purchase Russian crude oil. Moscow has proposed the Operational Services Center (PSC), a state-owned business in Russia, lead the negotiations.
On Monday, a PSC delegation landed in Karachi.
Due to negotiations taking place on March 21–22 with a delegation from Moscow, the PSC and PSO may both sign the agreement.
“The current price of Brent crude has decreased to $73 per barrel while the price of Russian crude oil stayed at $52 in February 2023, which has further decreased to $42–48 in the international market,” industry sources said.
They urged Pakistani refineries to independently buy Russian oil in accordance with the G7 nations’ rules. The administration is attempting to negotiate a GtG agreement, but below the G7-imposed price threshold of $60 per barrel.
Petroleum Division wants to lock in the deal under the GtG agreement at about $50 per barrel, which is $10 less than the cap price. During the war in Ukraine, the G7 nations capped the price of Russian oil.
There is no written order from Pakistan’s top man to buy Russian crude oil, according to some official sources; therefore, Russia needs to make sure Pakistan genuinely wants to buy its crude. Under the directive of Pakistan’s prime minister, officials are looking into opportunities to buy crude from Moscow.
“Russia has not yet made clear what discount it will provide.”
Before signing a deal, the Russian side will agree on all conditions, including the method of payment, the cost of shipment with a premium, and the price of insurance. In its discussions with the PSO’s technical team, the Russian PSC may provide a discount on the base price, according to the officials.