Pakistan’s government is looking to buy crude oil from Russia, Venezuela, and Nigeria to replace lost supply from the Middle East, Pakistan Today reports, adding that the government is also seeking LNG cargoes.
Pakistan has suffered a substantial hit from the energy price surge following the start of the war between the United States and Israel, and Iran, seeing record-high fuel import price premiums and a gas crunch that has led to blackouts.
To address the problem, the government in Islamabad is turning to alternative suppliers of both crude oil and LNG, likely taking advantage of the temporary sanction suspension on Russian barrels but also tapping recently sanction-freed Venezuelan crude.
In addition to the search for alternative supplies, the government of Pakistan has also asked the country’s Oil and Gas Regulatory Authority to launch a review of the oil supply chain on a national level and build a centralized management system to improve supply chain monitoring and prevent hoarding, the media outlet also wrote.
Pakistan is paying an all-time high premium of $34 per barrel on petroleum product imports amid the supply crunch caused by the war in the Middle East.
Previously, Pakistan State Oil, the national energy company, was paying around $12 per barrel over benchmark prices, Pakistani media reported earlier this week, citing a letter by the state company to Pakistan’s oil regulator urging it to include the higher premiums in local fuel prices.
The company, however, proposed that the government cover the difference rather than passing the record premiums on to end consumers.
Pakistan is heavily dependent on oil and gas imports, buying as much as 80% of its oil from abroad. In March, the Pakistan Institute of Development Economics warned that every additional $10 increase in international oil prices would add between $1.8 billion and $2 billion to the country’s energy import bill.
By Irina Slav for Oilprice.com
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