Petroleum Minister Ali Pervaiz Malik on Sunday said that Pakistan was “considering” purchasing cheaper Iranian oil and gas.
The option of sourcing Iranian crude oil supplies has again become available to Pakistan after a temporary easing of US sanctions on Tehran. By availing this opportunity, Pakistan could source discounted crude and refine it locally to produce higher-value petroleum products.
Sourcing crude oil from Iran could generate import cost savings of $170-340 million for Pakistan, assuming it imports 10-20 per cent of its total petroleum requirement at a discount, including freight savings.
But, while industry experts say local refineries are technically capable of processing Iranian crude, commercial and operational challenges remain, particularly due to the high furnace oil yield and the absence of significant domestic demand for the fuel.
Against this backdrop, Malik said while speaking to the media in Lahore that Pakistan was now mulling sourcing cheaper crude oil from Iran. He added that the government was “active regarding the reduction in oil prices”, noting that the rise in petrol and diesel prices had created difficulties for the entire nation.
But, that difficult phase had passed, he added. “Good times are coming now,” he said, further stating that the government had significantly reduced petrol and diesel prices.
On June 19, Prime Minister Shehbaz Sharif announced a Rs74 reduction in petrol prices and a Rs67 cut in high-speed diesel prices as the government sought to pass on the benefit of declining international oil prices.
The development came as tensions eased in the Middle East following the US-Iran interim peace deal and the restoration of energy shipping in the Strait of Hormuz. The blockade of Hormuz had resulted in a sharp increase in international oil prices, which went down following the easing of tensions.
Malik maintained that the reduction in local prices was more than the one in international oil prices.
Separately, Federal Minister for National Food Security and Research Rana Tanveer Hussain on Sunday said that Pakistan would consider purchasing oil from Iran once the sanctions imposed on the country are lifted, adding that an end to the recent conflict would contribute positively to Pakistan’s economic outlook.
Talking to the media, the minister said that the conclusion of the conflict would help place Pakistan’s economy on a path of improvement. He expressed the view that Israel was moving towards destruction and claimed that its downfall was inevitable. Rana Tanveer Hussain maintained that Israel was becoming increasingly isolated internationally and said that even the United States and the European Union were distancing themselves from Israel. He added that the repercussions of the conflict between the United States and Iran would continue to affect the region and the global economy for the next two years.
The federal minister said that Pakistan would review the possibility of importing oil from Iran once American sanctions on Tehran were removed. He also alleged that India was financially supporting Fitna al-Khawarij, while asserting that Pakistani security forces were carrying out effective operations against Indian proxies.
Commenting on the country’s political situation, Rana Tanveer Hussain said that if Pakistan Tehreek-e-Insaf behaved as a genuine political party, dialogue with it could take place at every level. He added that any political force sincere to the nation and its people should embrace the spirit of the Charter of Democracy. Criticising the Chief Minister of Khyber Pakhtunkhwa, the minister said that he should first make predictions regarding his own leader before commenting on the Prime Minister.