Pakistan’s state minister for petroleum Musaddiq Malik

Russia will sell crude oil to Pakistan at a discounted price, Pakistan’s state minister for petroleum said on Monday, days after he led a government team to Moscow to negotiate the deal.

Russia will also supply discounted petrol and diesel to Pakistan, Musaddiq Malik told a news briefing in Islamabad.

He did not specify the price of the discounted Russian oil or say whether the imports would comply with a $60 per barrel cap imposed by the G7 nations and the EU on Russian seaborne oil from this week over Russia’s invasion of Ukraine.

Moscow has said it will not sell to countries that comply with the cap.

There was no immediate comment from Russia’s energy ministry on a discount for Pakistan.

“Their government has also invited Pakistan to initiate talks on long-term contracts to buy liquefied natural gas (LNG),” he said, adding that Islamabad was already in talks with Russian private companies over the import of LNG.

Malik led the delegation to Moscow on 28 November.

Pakistan has been unable to procure LNG from the international market because spot prices remain out of its range and shipments under long-term deals remain insufficient to match rising demand.

With dwindling local gas reserves, the country has begun to ration supplies to residential and commercial consumers. Local media has also reported that oil supplies remain tenuous owing to difficulties in paying for imports.

Oil and energy make up the largest portion of Pakistan’s imports bill.

Owing to foreign reserves as low as $7.5 billion as of 25 November, hardly enough for a little over a month of imports, and a widening current account deficit, the South Asian economy has been facing a balance of payment crisis.

Moscow and Islamabad have also long been working on a gas pipeline project with little success.

As part of efforts to diversify energy production toward renewables to lower import bill, a US-funded project to refurbish and improve power generation capacity at the Mangla hydro power plant was inaugurated jointly by Prime Minister Shehbaz Sharif and US ambassador Donald Blome.

The $150 million project will add 300 megawatts of additional power to the plant’s capacity, enough to provide power to 100,000 households and 2 million Pakistanis, according to a statement from the US embassy in Islamabad.