Pakistan petroleum minister says purchasing Russian crude oil is ‘not a viable option’

KARACHI: Federal Minister for Petroleum Ali Pervaiz Malik has rejected suggestions to procure Russian crude oil as international oil prices have surged past $100 per barrel amid the fallout from the Iran–Israel conflict involving the United States, Israel, and Iran.

The government of Pakistan has announced a significant increase of Rs55 per litre in the prices of petrol and diesel, citing rising global oil costs linked to escalating tensions in the Middle East.

Under the new rates, petrol is cost Rs321.17 per litre, while diesel rose from Rs275.70 to Rs335.86 per litre.

Various quarters in the country have called for the import of Russian oil after Iran effectively halted shipping through the Strait of Hormuz, threatening nearly one-fifth of the global oil supply.

However, Ali Pervaiz Malik said importing Russian crude is not a viable option. Speaking to ARY News programme Aiteraz Hai, the petroleum minister said there are several challenges in procuring Russian oil, including financial constraints.

“Russian Urals is a very heavy crude,” he said. In Pakistan, most refineries are old hydroskimming petroleum refineries, except for the Pak-Arab Refinery Company (PARCO) refinery.

“When heavy crude is refined in hydroskimming refineries, it generates a large amount of furnace oil,” Malik said. A carbon levy is imposed on furnace oil under the International Monetary Fund’s Resilience and Sustainability Facility (RSF) because it is considered a highly polluting fuel.

“That changes the dynamics and viability of importing Russian Urals into Pakistan,” he added.

Malik said the government is engaging with the IMF on the issue, noting that global energy markets are currently facing intense demand. “There is a rush for every molecule,” he said.

He added that Pakistan has requested the IMF to remove levies on fuel under the RSF and the Extended Fund Facility (EFF) so that alternative fuels can be consumed locally and to help cope with challenges in the gas sector.

According to Malik, LNG supplies from Qatar have been suspended, and Pakistan is considering generating electricity from furnace oil to meet energy requirements.

for that reasion russian crude is never commercialy viable becuase our refenieries are not that upgrade, he added.