Islamabad: Pakistan has placed an order for a cargo of Russian oil but is keen on a long-term deal to buy crude in Chinese currency, according to the country’s energy minister.
Minister Khurram Dastgir Khan said in an interview late last week that the payment for the first shipment was made in US dollars, but Pakistan wanted further purchases to be made in yuan because of the country’s currency swap arrangement with China. .
“We hope that if this becomes a long-term arrangement, it will become a rupee and Chinese currency transaction,” he said. “And maybe that currency swap needs to be bigger so that we can take advantage of other opportunities that may arise.”
Such a deal would be in line with Russia’s desire to move away from using the dollar or euro for its exports and China’s ambitions to take the yuan globally to overcome its dominance. It would also provide some relief to Pakistan, which is heavily dependent on energy imports and is trying to revive a stalled $6.5 billion bailout package with the International Monetary Fund to avoid default.
Responding to questions, a spokesman for the petroleum division of the energy ministry said the first shipment of Russian oil from Pakistan would arrive within a month, and was bought at a discount.
China and India – the biggest importers of Russian oil – are increasingly using the yuan, ruble or UAE dirham to pay for shipments. It is not clear whether Indian refiners are using the rupee, but the Russian Foreign Minister sergei lavrov Said this month that the Kremlin now has too much Indian currency that it cannot use.
The use of the yuan in global trade, while still modest compared to the dollar, appears to be gaining traction. Brazilian hardwood pulp producer Suzano SA is considering selling its products to China in yuan, and Bangladesh recently asked Russia to pay $300 million related to the construction of a nuclear plant near Dhaka in renminbi. have agreed with, officials familiar with the matter said.
Pakistan has been trying to restart bailout talks with the IMF for almost six months. Petroleum Minister Mussadiq Malik said in a Bloomberg TV interview on Tuesday that the multilateral lender expressed reservations about plans to raise fuel prices for the wealthy in order to finance subsidies for low-income earners.
According to Minister Khan, the South Asian nation’s energy crisis is not as severe as last year due to weaker demand for electricity due to relatively cooler weather and higher electricity prices. The country is better positioned ahead of peak demand in summer, with Pakistan able to produce more electricity from recently stored oil and additional coal production coming on stream, he said.
Khan said the government is expected to soon approve Saudi Arabia’s plan to build an oil refinery in Pakistan. Both countries agreed in principle to set up the facility in 2018.
Minister Khurram Dastgir Khan said in an interview late last week that the payment for the first shipment was made in US dollars, but Pakistan wanted further purchases to be made in yuan because of the country’s currency swap arrangement with China. .
“We hope that if this becomes a long-term arrangement, it will become a rupee and Chinese currency transaction,” he said. “And maybe that currency swap needs to be bigger so that we can take advantage of other opportunities that may arise.”
Such a deal would be in line with Russia’s desire to move away from using the dollar or euro for its exports and China’s ambitions to take the yuan globally to overcome its dominance. It would also provide some relief to Pakistan, which is heavily dependent on energy imports and is trying to revive a stalled $6.5 billion bailout package with the International Monetary Fund to avoid default.
Responding to questions, a spokesman for the petroleum division of the energy ministry said the first shipment of Russian oil from Pakistan would arrive within a month, and was bought at a discount.
China and India – the biggest importers of Russian oil – are increasingly using the yuan, ruble or UAE dirham to pay for shipments. It is not clear whether Indian refiners are using the rupee, but the Russian Foreign Minister sergei lavrov Said this month that the Kremlin now has too much Indian currency that it cannot use.
The use of the yuan in global trade, while still modest compared to the dollar, appears to be gaining traction. Brazilian hardwood pulp producer Suzano SA is considering selling its products to China in yuan, and Bangladesh recently asked Russia to pay $300 million related to the construction of a nuclear plant near Dhaka in renminbi. have agreed with, officials familiar with the matter said.
Pakistan has been trying to restart bailout talks with the IMF for almost six months. Petroleum Minister Mussadiq Malik said in a Bloomberg TV interview on Tuesday that the multilateral lender expressed reservations about plans to raise fuel prices for the wealthy in order to finance subsidies for low-income earners.
According to Minister Khan, the South Asian nation’s energy crisis is not as severe as last year due to weaker demand for electricity due to relatively cooler weather and higher electricity prices. The country is better positioned ahead of peak demand in summer, with Pakistan able to produce more electricity from recently stored oil and additional coal production coming on stream, he said.
Khan said the government is expected to soon approve Saudi Arabia’s plan to build an oil refinery in Pakistan. Both countries agreed in principle to set up the facility in 2018.