02Jun, 23 June 2, 2023

ISLAMABAD: The vessels carrying 100,000 tons of discounted Russian oil will arrive at Pakistan ports in the first week of June which is part of the energy security plan of the government.

State Minister for Energy, Musadik Malik announced this during an off-camera meeting with mediapersons on new refinery policy, which aims at incentivising the greenfield investment in shallow, deep conversion, and ultra-deep conversion new refineries up to 20 years.

“Russian cargo carrying 100,000 tons Urals will reach at Oman port on May 26-27 where oil in small vessels will be transported to Pakistan in seven to 10 days,” the minister said. The transportation cost would be increased but not much, he assured.

Pakistan buys Russian oil but sees diversified future

He did not share discounted price tag of Russian oil and payment mode, however, hinted that the payment was made through banking channel. The heavy Urals would than refined at the Parco. Later, it would be mixed with light Arabian oil to bring down the price.

He further disclosed that a new refinery policy would help to accelerate the required energy growth which is pivotal for economic growth. “One percent economic (GDP) growth required 1.5 to two percent growth in the energy sector and five percent GDP growth requires seven to 10 percent energy growth which cannot be possible without investment in refineries and exploration and production of oil and gas sector,” he maintained.

The new refinery policy has 20 years’ incentives for 300,000 tons capacity refinery and 10 years below 300,000 tons refinery but it will be mandatory the financial closure would be within five years.

The import duty on the equipment used in the refinery on 300,000 and above would be 7.5 percent on MS and diesel for 20 years and the same incentives will be applicable for 10 years on below capacity of 300,000 new refineries. Both types of refineries would be incentivised as per special economic zone (SEZs) laws, he added.

He said by 2030, the consumption of petrol and diesel would increase from 20 million to 33 million. Presently, the production of local refineries was 10 to 11 million and rest imported. The premium on diesel was up to $18 globally due to high demand, he added.

Multiple foreign countries and private companies have shown interest in the new refinery policy and a positive response received at a road show conducted in the US on greenfield investment.

He further said that a comprehensive plan for the energy security of the country would be implemented before the end of the constitutional tenure of the present government. The negotiation on Turkmenistan-Afghanistan-Pakistan-India (TAPI) was again started, Iran-Pakistan (IP) was delayed due to the US sanction and LPG Air Mix policy and brown field policy would soon be approved, he added.

Copyright Business Recorder, 2023

Add Comment

Your email address will not be published. Required fields are marked *