Against the government’s high hopes, Russian Oil will be only Rs. 1-2/liter cheaper than the current petrol price in Pakistan. According to a report by an English newspaper, Pakistan’s maximum benefit from Russian Crude Oil would be $7-8 million per 100,000 tonnes compared to Middle Eastern Oil. This translates to Rs. 1.30/liter discount for the end consumer.

According to the economist Abdul Rehman “higher than expected furnace oil yield (60% compared to expected 40-50%) has ended the hopes of savings from cheap Russian Oil. “Pakistan needs a deep conversion refinery to benefit from Russian crude, construction of such a refinery will take a minimum of 4-5 years,” he explained.

Savings from Russian 🇷🇺🇷🇺 crude oil only Rs1-2/litre‼️

Higher than expected furnace oil yield (60% vs 40-50% expected) has wiped out the expected savings from cheap Russian oil.

🇵🇰🇵🇰 needs a deep conversion refinery to benefit from Russian crude, construction of such a refinery…

— Abdul Rehman (@AbdulRehman0292) July 5, 2023

Quoting an Energy official, the media report suggested that the discount could further increase to Rs. 1.60/liter petrol for the end consumers if National Refinery Limited, Pakistan Refinery Limited, and PARCO refined this Oil.

The same official stated that the ultimate benefit for the end consumer is too low against the government’s high hopes for Russian Crude Oil, being refined by decades-old Pakistan Refinery Limited. “If Pakistan had a state-of-the art-deep conversion refinery, the benefit would have been maximum with high production and zero furnace oil output,” the official explained.

First Consignment in Pakistan 

On June 13, the first ship or vessel carrying Russian Oil reached Karachi, Pakistan. According to a Karachi port spokesperson, a 183-meter-long vessel with 45,142 metric tons of Russian Oil arrived at the port.

Russian Oil has been in the news for the last year or so in Pakistan. The former government of PTI made its first announcement when it wrote an official letter to Moscow requesting Oil at cheap rates. However, after the toppling of that government, the project was delayed for over a year. Then there was a debate over a couple of aspects regarding this Oil. First, it was debated whether Pakistani refineries could refine crude Oil from Russia or not, then it was about its price and whether it would bring the prices of fuel in the country down. 

In an energy conference, Mr. Malik concludes the whole episode about the price of Russian Oil with a single sentence stating that one cargo is insufficient to lower the petrol prices in the country. He added that we may decrease the cost after receiving multiple oil consignments from Russia.