Pakistan suspends imports of Russian crude on “technical grounds”

economictimes.indiatimes.com:

Pakistan has suspended import of Russian oil after two consignments on the grounds of “quality of crude”. The Pakistan government has blamed the quality of Russian crude for its decision even as Russian oil continues to top Indian energy imports. Refineries in Pakistan have refused to process Russian oil, as less petrol was being produced from it with 20 per cent more furnace oil compared to the Arabian crude, ET has learnt.

Two crude oil ships from Russia had arrived at the Karachi Port on June 11 and 26, after which no Russian oil vessel reached Pakistan. The first shipment carried 45,000 tons of crude. The second ship, with about 56,000 tons of crude oil, had anchored at the Karachi Port on June 26.

ET had reported in July that 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 had visited Karachi in July 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 had reported. Unlike India’s case Russia was not offering any special discount to Pakistan for the imported crude, according to persons tracking Russian oil exports.

Further the government Pakistan failed to pass on the discounts to its citizens. Pakistan had used Yuan to pay for the Russian crude. Islamabad entered into the Russian deal to save on foreign exchange reserves by managing better discounts.