Modest 1 Rupee Reduction in Russian Crude Oil Prices




Modest 1 Rupee Reduction in Russian Crude Oil Prices
The utilization of Russian crude oil and its impact on petroleum prices in Pakistan recently took center stage during a briefing to caretaker Prime Minister Anwaar-ul-Haq Kakar. The outcome of this discussion revealed that the Pakistani public can anticipate a minimal reduction of only Rs. 1 on imported Russian crude oil, shedding light on the complex dynamics at play.
Benefits and Limitations of Russian Crude
The Petroleum Division elucidated that the advantages of incorporating Russian crude into Pakistan's fuel production are rather modest, translating to a mere Rs. 1 per liter reduction for both petrol and diesel.
However, importing Russian crude entails a set of challenges, primarily a protracted transportation process spanning 30 to 36 days. Furthermore, a considerable 60 percent of furnace oil derived from this crude must be exported, resulting in a notable 25 percent loss.
At present, Pakistan Refinery Limited (PRL) stands as the sole contender willing to refine Russian crude oil. In this scenario, consumers should expect a meager Rs. 1 reduction per liter in petrol and diesel prices.
Yet, should PARCO and NRL (National Refinery Limited) collaborate in the refining process, the potential benefit could escalate to Rs. 3 per liter, contingent upon the volume of crude involved. Leveraging PARCO's advanced facilities could enhance yields from Russian crude and curtail furnace oil production.
Hurdles in Refining Russian Oil
Notably, both PARCO and NRL have opted against refining Russian oil, presenting challenges in fully realizing the potential benefits.
Russian oil currently carries a price tag of $73 per barrel, whereas the Brent price hovers at $87 per barrel. Russia has scaled back its discount to $5 per barrel, raising concerns about surpassing the $60 per barrel cap price imposed by G7 countries, particularly regarding payment mechanisms.
Pakistan Refinery Limited (PRL), with its decades-old expertise, has pursued a strategy of refining Russian URAL crude by blending it with Middle Eastern and local crude. This approach results in a production mix of 10 percent petrol, 60 percent furnace oil, and 10-15 percent high-speed diesel.
Due to the dense viscosity of furnace oil derived from URAL crude, PRL must blend in 10 percent diesel to reduce its viscosity for efficient flow. Consequently, this leads to a notable increase in furnace oil output while diminishing diesel production.
The utilization of Russian crude in Pakistan's fuel production is undeniably a multifaceted issue characterized by various challenges and potential benefits. The decisions made in this regard will reverberate through fuel prices and the country's energy landscape, underlining the need for careful consideration and strategic planning.
Russian crude oil
Petroleum prices
Pakistan Refinery Limited
PARCO and NRL
Fuel production
Price reduction
Energy landscape
Oil refining
Global oil market
Petrochemical industry
Related Auto News Updates
Latest Discussions
Comments
Add a Comment "Modest 1 Rupee Reduction in Russian Crude Oil Prices"