Oil refineries in Pakistan not ready to import Russian oil

The National Refinery Limited in Pakistan has excused from the import of Russian crude oil.  

The refineries in the country showing their limitations said that the transportation cost, increase voyage time, low/no capacity to process it, payment procedure and the long-term contract with Middle Eastern suppliers are the main hurdles in the way of the Russian oil import.

The National Refinery Ltd has said that NRL has lube refineries and the configuration of the refineries restricts the list of feedstocks. The company said that it has from time to time unsuccessfully trying to identify alternate feedstock to Arabian light crude, which suits the refinery configuration.

The normal sailing time from the Middle Eastern ports is about 4 days, whereas not being aware of the port of shipment ex-Russia and the possible route, it is estimated that the voyage time (one way) would be about 20 days. Moreover, the route is likely to pass through war zones.

Transportation/freight analysis for import from Russia in comparison with normal imports from Middle East, cost & benefit analysis a) PRL import major chunk of its crudes oil from middle east region whose freight varies between 1.0-1.5 dollar per barrel. b) Freight charges from KOZMINO load port RUSSIA to Karachi is 8.0 dollar/barrels as quoted by national carrier as provisional quote. Similarly, the sea voyage time from KOZMINO port to Karachi is approximately 22 days.

Payment Methodology Confirmed Letter of Credit (L/C) in USD from first class bank will be required for payments. However, it is pertinent to mention here that presently all Pakistani banks are not willing to open LCs for Russian Origin crudes.