The move helped Moscow achieve two aims. First, it ensured that India will not be upset by its oil deal with Pakistan. Second, a discounted source of oil to Pakistan will help it negotiate with a stronger hand with the west-dominated International Monetary Fund (IMF) for removing subsidies from pump prices. The removal of subsidies would have made petrol and diesel costlier which would have made the present government unpopular.
Twin Objective
With this, Russia ensured India won’t be upset by its discounted oil deal with Pakistan
Secondly, it’ll help it negotiate with International Monetary Fund for removing subsidies from pump prices. The removal of subsidies would have made petrol and diesel costlier which would have made the present government unpopular
Reports said the Russian oil was offered at a 20 per cent discount, but Moscow stipulated that it would be sourced from the Russian oil refinery located in India and that the payment would not be in US dollars, but in Chinese Yuan.
The Pakistan government stalled for some time but gave in. However, Pakistan PM Shahbaz Sharif did not mention the conditions in his statement where he said, “One lakh tonne oil deal has been signed with Russia. We got 45,000 tons of them.”
Pakistan’s Minister of State for Petroleum Musadik Malik also mentioned the pre-condition. “I have fulfilled another of my promises to the nation. This is the first-ever Russian oil cargo to Pakistan and the beginning of a new relationship between Pakistan and the Russian Federation,” he had tweeted. The oil is being supplied to Pakistan reportedly at $64 per barrel as against the market price of around $80 per barrel.
The Russian oil was loaded into a crude oil tanker from Russia’s Primorsk on May 8 and reached Wadinar in Gujarat where it was refined and then sent to the UAE. The consignment then left UAE on June 6 and reached Karachi five days later.