PRL says Russian oil 'commercially feasible'

• "Russian crude was successfully processed," refinery says.
• PRL says negotiations for another spot deal are in progress.
• Reports claimed PRL opted against refining Russian oil.

KARACHI: Pakistan Refinery Limited (PRL) on Sunday contradicted the report that Russian crude oil import was suspended because of processing issues and announced that negotiations for another spot deal are in progress, The News reported.

"The Russian crude was successfully processed and the spot deal was technically and commercially feasible," Zahid Mir, chief executive of PRL, said in a written clarification.

News reports surfaced last week that due to refining issues at the refinery, the import of Russian crude oil had been suspended.

Mir said the PRL would process the Russian crude oil again when available at favourable commercial terms, asserting that negotiations for another spot deal were in progress.

Sources in the energy sector had told The News that Pakistan had suspended its import of crude oil from Russia after the refining process yielded more furnace oil than petrol.

The sources said the Pakistan Refinery had refused to process more Russian oil, as it yielded less petrol with 20% more furnace oil than Arabian crude oil.

They added that the benefits of importing Russian crude oil were limited, with a larger quantity of export of furnace oil at a lower price.

Some sources also claimed that Russian oil had yielded less kerosene and jet fuel for ships, which was not beneficial for the country.

Moreover, according to industry sources, Pakistan Refinery had given up refining Russian oil for now, despite the insistence of former state minister for petroleum Musadik Malik.

Two crude oil ships from Russia had arrived at the Karachi Port on June 11 and 26, after which no Russian oil ship came to Pakistan.

The issue of importing oil from Russia has gained great political and diplomatic importance over the past year.

Pakistan kept the exact price of Russian oil and its arrival secret and the payment was made in Chinese yuan.

The first shipment reached Karachi Port on the evening of June 11, carrying about 45,000 tonnes. The second ship, with about 56,000 tonnes of crude oil, had anchored at the Karachi Port on June 26.

According to experts, if the prices of Brent crude oil and Arab Light Sea crude oil increase further and the cost of Russian oil does not increase, only then can the purchase of Russian oil be beneficial for Pakistan.

But chances for such a situation are limited, the experts believe. They said that another possibility for resuming the purchase of crude oil from Russia was that it [Russia] should create a special price discount for Pakistan.