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President Putin to ‘decide’ on Russian oil price discount for Pakistan

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  • Putin labels Pakistan ‘key partner’ in special message to Shehbaz.
  • Sources say there will be no decision on discount in crude price during ongoing talks.
  • Moscow will announce price of Russian crude once MoU is signed.

LAHORE/ISLAMABAD: Pakistan could secure crude oil deal with Russia on desired discount rate if Prime Minister Shehbaz Sharif contacts Russian President Vladimir Putin, The News reported on Friday citing sources.

Pakistan is interested in buying around 100,000 barrels per day of Russian crude oil and if the country’s refineries get synchronised well with the blended Russian crude oil, then the quantity of crude from Russia would be increased accordingly.

Amid ongoing talks with the Russian Federation, the two sides are working to finalise a Memorandum of Understanding (MoU) or a protocol that may be signed today at the end of three-day talks.

However, Moscow clearly communicated to Islamabad that it would announce the price of Russian crude for Islamabad once an MoU or a protocol was signed for energy trade (crude oil, petroleum products and liquefied natural gas), which would show the seriousness of the Government of Pakistan towards the energy trade.

“The experts from Russia also asked Pakistan counterparts not to mention the price cap of $60 per barrel imposed on Russian oil by G7 countries while discussing the crude import,” the officials involved in the talks told The News.

However, sources told the publication that the issue of discount as desired by Pakistan on crude oil would be decided by Russian President Putin if the Pakistan government’s top man contacts him.

It should be noted that the Russian oil price in the international market currently hovers between $70-75 per barrel whereas Brent is priced at $81 per barrel. However, Pakistan hopes that it will get crude oil below $60 per barrel from Russia under the government-to-government mode.

As far as the $3 billion Pakistan Stream Gas Pipeline (PSGP) is concerned, Pakistan is of the view that it will erect the pipeline but it is linked with the supply of more LNG and infrastructure at the port. Russia wanted to initiate the project and move forward in finalising the shareholding under the existing intergovernmental agreement. 

But now Pakistan wants it to execute the project on a BOOT (build, own, operate and transfer) basis.

Overall, the officials said that the talks under the inter-governmental commission level are moving forward on a positive trajectory, but after the signing of the MoU for energy trade, Russia will come up with the price for Pakistan. 

Officials said this means there will be no decision on the discount in crude price and life of the government-to-government agreement during the ongoing talks.

However, Pakistan State Oil (PSO) mandarins are engaged on behalf of Pakistan with Russian officials and experts on the issue of import of crude, finished products and LNG issues and officials of Oil and Gas Development Company and Mari Gas Company are in talks on the issue of building LNG storages.

“PARCO can process the Russian blended oil by up to 30%, Pakistan Refinery Limited 50% and the Cynergico Refinery can process the maximum. As for the LNG import, the private companies of Russia have told Pakistan that they can offer it after 2025-26 on a long-term basis,” the sources revealed.

Putin views Pakistan as ‘key partner’

In a separate development, a delegation led by Russian Energy Minister Nikolay Shulginov called on PM Shehbaz in Lahore and discussed cooperation in various fields to strengthen Pakistan-Russia relations.

Welcoming the delegation, the prime minister highlighted the importance Pakistan attached to its relations with the Russian Federation.

He recalled his meeting with President Putin in Samarkand in September 2022 and said that the meeting had reached important decisions to strengthen bilateral relations. He further noted with satisfaction the keen desire on both sides to upgrade the bilateral cooperation in trade, investment and economic matters.

The Russian minister reciprocated the PM’s sentiments and delivered a special message of President Putin to his host.

In his message, President Putin, referring to Pakistan as Russia’s important partner in South Asia and the Islamic world, reiterated his strong interest to deepen the bilateral relationship.

Both sides agreed on the importance of the energy sector for the development of bilateral economic and trade relations. In this regard, views were exchanged on supplying oil and gas from Russia to Pakistan on a long-term basis. Matters related to gas pipelines were also reviewed.

PM Shehbaz also provided guidance for the work of the eighth round of the Pakistan-Russia inter-governmental commission meeting, scheduled to be held in Islamabad on January 20.

Federal ministers Sardar Ayaz Sadiq, Syed Naveed Qamar, Minister for State for Petroleum Musadik Malik and Special Assistant to the Prime Minister Tariq Fatimi were also present.

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Tourism boom: During Eidul Azha, more than 400,000 people travel to KP

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Over 400,000 people travelled to several beautiful locations in Khyber Pakhtunkhwa between June 17 and June 19, celebrating the recently ended Eidul Azha festivities.

With over 174,000 visitors in one day, Naran Kaghan emerged as the most popular location. Visitors looking for a getaway from the city are still drawn to Naran Kaghan’s calm scenery and charming valleys.

A total of 162,000 visitors to Galiyat took in the city’s rich history at its cultural institutions and historical landmarks. In addition, more than 46,000 people visited Malam Jabba in Swat, and 23,000 people visited Upper Dir to take in its stunning surroundings.

Khyber Pakhtunkhwa is becoming a popular domestic vacation destination due to its unique combination of natural beauty, cultural legacy, and adventure options, as seen by the rise in visitor numbers.

Businesses and local government agencies have been collaborating to make sure tourists have an unforgettable time while appropriately handling the inflow.

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Pakistan currently has $14.41 billion in foreign exchange reserves.

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In a statement, the central bank stated that as of June 14, 2024, Pakistan’s foreign exchange reserves held by the State Bank of Pakistan (SBP) stood at $9.135 billion, following the increase.

The announcement also stated, “SBP reserves increased by US$ 31 million to US$ 9,134.7 million during the week ended on June 14, 2024.”

The State Bank of Pakistan (SBP) stated that the nation had $14.415 billion in total liquid foreign reserves. Commercial banks own $5.28 billion of the total in net foreign reserves.

It was announced earlier on June 13 that Pakistan’s foreign exchange reserves reached US$14.38 billion, up US$168 million in the first week of June.

Pakistan’s reserves held by commercial banks rose by US$174 million to $5.28 billion for the week that ended on June 7, according to a statement released by the central bank.

The SBP now has US$9.10 billion in reserves, down US$6.2 million from before. The central bank did not provide an explanation for why its reserves fell.

“SBP reserves decreased by US$ 6 million to US$ 9,103.3 million during the week ended on July 7, 2024,” the SBP said in a statement.

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In a first for history, PSX crosses the 77,000 milestone.

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At 77,213.31, the benchmark KSE-100 hit an all-time high, up 1,005.15, or 1.32%, from the previous close of 76,208.16.

The government’s readiness to seal an agreement with the International Monetary Fund (IMF) following the budget was cited by analysts as the reason for the upward trend.

Experts anticipate that in an attempt to bolster its position for a fresh bailout agreement with the International Monetary Fund (IMF), the budget for the fiscal year ending in June 2025 would set aggressive fiscal goals.

Budget for Pakistan, 2024–2025
Pakistan’s budget for the fiscal year 2024–25, with a total expenditure of Rs18.877 trillion, was presented on Wednesday by Minister of Finance and Revenue Muhammad Aurangzeb.

The Finance Minister, Muhammad Aurangzeb, outlined the budget highlights. He stated that the GDP growth target for the fiscal year 2024–25 is set at 3.6 percent, while the inflation rate is anticipated to stay at 12 percent.

He stated that while the primary surplus is anticipated to be 1.0 percent of GDP during the review period, the budget deficit to GDP is forecast to be 6.9 percent over the period under review.

According to the minister, tax income collection increased by 38% in the current fiscal year, and the province will receive Rs7,438 billion. The Federal Board of income expects to earn Rs12,970 billion in revenue for the upcoming fiscal year.

In contrast to the federal government’s projected net income of Rs9,119 billion, he stated that the federation’s non-tax revenue projections are set at Rs3,587 billion.

The federal government’s total outlays are projected to be Rs18,877 billion, with interest payments accounting for the remaining Rs9,775 billion.

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