Karachi : Mr. Irfan Iqbal Sheikh, President FPCCI, has echoed the welcoming and relieving sentiments of the entire business, industry and trade community of Pakistan on country’s first order for comparatively much cheaper Russian crude vis-à-vis rest of the world oil markets – and, as per prevalent rates, Pakistan may benefit up to $18 / barrel or up to 30 percent.
Mr. Sheikh pinned his hopes that the first cargo will arrive at the Karachi port in May 2023. It makes economic sense as well to import crude only as three big refineries in the country have the capacity to refine Russian crude, he added.
Mr. Irfan Iqbal Sheikh also appreciated that the government wants to gradually enhance the total imports of the suitable Russian crude to 100,000 barrels per day. Nonetheless, it will take some bold steps from the economic & energy team; resolution of teething problems in shipping & logistics and streamlining of the commercial transactional procedures; for the very fact that 100,000 bpd will be a big number for Pakistan as the country imported 154,000 bpd in the year 2022.
He elaborated that this single step – though a lot procrastinated despite repeated demands of the business community – will take some burden off Pakistan’s foreign exchange reserves (FER), balance of payment, trade deficit and soaring inflation, as petroleum imports is the single largest category in country’s total import bill.
FPCCI Chief said that, time and again, business community has proven that it supports any geo-economic & geo-strategic decision that goes in the national interest; and, many countries in the world are importing Russian crude on discounted rates – including those of large economies in our allied and friendly countries. Additionally, the move doesn’t violate any international law, treaty or sanctions. As far as the regional counties go, both India & China are major importers of Russian oil as well, he added.
Mr. Irfan Iqbal Sheikh demanded that the progression to enhance the import volumes of the Russian crude should be taken up in a phased manner to be sustainable but steady & incremental – and, to top it all, the downward price differentials should be passed on to the business community & the general public should be swift & efficient to effectively break the unending double whammy of recessionary & inflationary pressures plaguing the entire economy for the past 12 – 18 months.
It is a golden opportunity for the government to utilize this avenue to reduce cost of doing business in Pakistan to some extent; allow LCs to settle smoothly through reduced pressure on dollar reserves; curtail prices of essential commodities through shrinking transportation costs; stabilize rupee-dollar parity and provide little but much needed interim relief to the masses.
