Photo courtesy PID
Minister of State for Petroleum Musadik Malik on Saturday night claimed that first shipment of discounted oil from Russia will reach Pakistan next month, adding the government will pass on the benefit of the reduced prices to the general public.
While speaking with Geo News, he said a deal for discounted petrol had been finalized with Russia after several successful rounds of dialogue. “The first shipment will reach Pakistan next month [May] through a cargo,” he said, explaining that the government was working on a tiered pricing mechanism under which the impoverished would pay less for fuel, while the richer segments of society would pay more.
Malik did not, however, specify how much discount Islamabad was getting from Moscow for the petrol.
Oil output cut
The minister’s claims come against the backdrop of oil prices surging after an announcement by the Organization of the Petroleum Exporting Countries (OEPC) and their allies, including Russia, to cut output by about 1.16 million barrels per day. In a statement, Saudi Arabia said the move was a “precautionary measure” to support market stability. According to Reuters, OPEC+ had already announced it would cut daily production by 2 million barrels per day, and the latest announcement had taken the total output cut to 3.66 million barrels per day, or 3.7 percent of global demand.
Oil observers have warned that the cut would lead to a boost in oil prices, which would be especially punishing for Pakistan, as it would trigger a new round of inflation and increase the public’s difficulties in being able to afford essential commodities. Prior to the announcement, Brent crude had slid to around $70/barrel, its lowest value in 15 months; after, it soared to $84.26/barrel.