Pakistan's plan to import Russian crude hits payments roadblock
Pakistan's plan to import future shipments of Russian crude oil under a government-to-government (G2G) mechanism has hit a roadblock as Moscow is frustrated with the delay by Islamabad in setting up a Special Purpose Vehicle (SPV) to handle the payments and shipments. A Russian delegation visited Karachi last week to discuss the quality and pricing of its Ural grade crude oil, but was not satisfied with the progress made by Islamabad in creating the SPV, ET has learnt.
This delegation from Russia visited Pakistan during the same week Unlike for India Russia is also not offering any special discount to Pakistan for importing crude, according to persons tracking Russian oil exports. Pakistan has so far imported two consignments of Russian crude but has failed to pass on the discounts to its citizens.
Pakistan's refineries are also dragging their feet regarding refining of Russian crude on the grounds of technicalities, claimed one of the persons quoted above. The first consignment of Russian crude arrived at Karachi port last month.
Pakistan used Yuan to pay for this consignment. Islamabad entered into Russian the deal to save on foreign exchange reserves hoping to manage better discounts.
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