AS high global oil prices hit all sectors of the economy, and with more petroleum price shocks in the pipeline, the search for cheaper oil should be a national priority, along with exploring other, more affordable energy options. One option that was floated by the former PTI government was of buying discounted Russian crude. However, as Finance Minister Miftah Ismail told CNN on Tuesday, Russia had not replied to the previous administration’s communication regarding the purchase of discounted crude. Moreover, Mr Ismail pointed out the fact that sanctions stand in the way of buying Russian oil, while Pakistan also lacks roubles to buy the crude, which is one of Moscow’s demands. Therefore, the finance minister told the American broadcaster that “it’s very difficult for me to imagine buying Russian oil”.
However, considering Pakistan’s dire economic predicament, all avenues must be explored to ensure energy security. Where buying Russian oil at discounted rates is concerned, perhaps the new administration must again approach Moscow to confirm its interest in the sale, or otherwise. But even if there are positive signals from the Russians, the question of sanctions arises, as the West has practically cut off Moscow from the global financial system. There is also the question of compatibility of Russian crude with Pakistan’s refining capabilities. Yet if Pakistan is serious, these obstacles can be overcome. For example, if India, a major American ally, can buy deeply discounted Russian crude with the US looking the other way, why should there be pressure on Pakistan not to attempt a similar purchase? Elsewhere in the region cash-strapped Sri Lanka has also purchased Russian crude on credit. In fact, even the EU, which is a major backer of Ukraine in the conflict against Russia, has said oil imports from Moscow will be cut back “gradually”, while some EU members have been temporarily exempted from the ban. Therefore, if Russia is willing to sell and Pakistan is ready to diplomatically defend its purchase of oil, attempts should be made to explore this option.
Published in Dawn, June 2nd, 2022
