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ISLAMABAD, June 11 (PTI) Pakistani Prime Minister Shehbaz Sharif announced on Sunday that the first shipment of discounted Russian crude has arrived in the port city of Karachi, a development that will provide relief to those hit by soaring inflation.
Pakistan, currently grappling with high foreign debt and a weak currency, hopes that a discounted purchase of crude from Russia will stabilize oil prices in the country.
Petrol prices in the country are now at Rs 262 per liter.
A cargo ship carrying about 45,000 metric tons of Russian crude docked at a port in Karachi on Sunday.
“I have fulfilled another of my promises to the country. Pleased to announce that the first cargo of discounted Russian crude oil has arrived in Karachi and will start unloading tomorrow,” Prime Minister Sharif tweeted.
“Today is a day of change. We are moving closer to prosperity, economic growth, energy security and affordability,” he said.
Sharif added that this was the beginning of “a new relationship between Pakistan and the Russian Federation”.
According to media reports, the deal will see Pakistan buy crude oil instead of refined fuel, with imports expected to reach 100,000 barrels per day if the first deal goes through.
In December 2022, Russia refused to offer Pakistan a 30% discount on crude oil after the Pakistani delegation demanded a price cut.
In January this year, a Russian delegation arrived in Islamabad for talks to resolve technical issues such as insurance and mortgages.
In April, Pakistan ordered discounted Russian crude for the first time under an agreement between Islamabad and Moscow.
Energy accounts for the lion’s share of Pakistan’s imports, and cheap oil from Russia will help Pakistan stem a ballooning trade deficit and balance-of-payments crisis.
Last year, Pakistan imported about 154,000 barrels of oil per day, with about 80% of the supply coming from Saudi Arabia, the United Arab Emirates and other Gulf states.
The country’s total foreign exchange reserves fell to around $3.9 billion in the week ended June 2, State Bank of Pakistan data showed.
Pakistan’s inflation rate rose to 38% in May from a record high of 36.4% in April, data from the Central Bank of Pakistan showed.
Last year’s catastrophic floods submerged a third of the country, displaced more than 33 million people and cost Pakistan’s already crumbling economy $12.5 billion.
Pakistan and the International Monetary Fund failed to reach a staff-level agreement on a much-needed $1.1 billion rescue package aimed at preventing the country from going bust.
The funds are part of a $6.5 billion rescue package approved by the International Monetary Fund in 2019, which analysts say is crucial if Pakistan is to avoid default on its foreign debt.
Pakistan’s purchases provide Russia with new crude customers beyond India and China.
The United States and other Western countries have imposed a series of severe economic sanctions on Russia since the outbreak of the Ukraine war last year.
(This is an unedited and auto-generated story from a Syndicated News feed, the content body may not have been modified or edited by LatestLY staff)
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