March 28, 2023

The government has received responses from a number of local refineries for buying oil from Russia after it invited suggestions for this purpose. The Ministry of Energy (Power Division) had asked the Managing Directors of the key local oil refineries of the country for a detailed analysis regarding the option.

The ministry has so far received responses from Pak Arab Refinery Limited (PARCO), National Refinery Limited (NRL), and Pakistan Refinery Ltd (PRL).

PARCO’s response

Russian crude grades are technically suitable for processing at Mid-Country Refinery (MCR) in the range of 15-30 percent of the crude oil blend. The sea voyage from Black Sea Ports would also be around 16-25 days compared to 4-5 days from Middle-Eastern Ports.

It said that a payment mechanism will have to be devised between the two countries to enable them to do so.

National Refinery Limited’s Response

The NRL has lube refineries and the configuration of the refineries restricts the list of feedstock. It has been unsuccessfully trying to identify alternate feedstock to Arabian light crude, which suits the refinery configuration. The company has a long-term agreement with Saudi Aramco for processing Saudi Arabia’s crude.

Pakistan Refinery Limited’s Response

The transportation cost of Russian Crude will be 433 percent higher, while voyage time is four times higher than the Middle-Eastern import of oil. Pakistan Refinery Limited has said that presently all Pakistani banks are not willing to open Letters of Credits (LCs) for Russian Origin crudes.

It added that further evaluation is needed to determine the economic viability of the subject crude.

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