Pakistan finance minister says it may buy discounted Russian oil

If India buying oil from Russia, ‘we also have a right’, minister says as Pakistan aims to preserve its shrinking forex.

Minister of Finance Ishaq Dar's comments come amid concerns Pakistan might need to reschedule its Paris Club debt following massive floods [File: Mian Khurshee/Reuters]

Published On 19 Oct 202219 Oct 2022

Pakistan is considering buying discounted Russian oil, its finance minister has said, as he sought to allay concerns that the country might need to reschedule its Paris Club debt following devastating floods.

Credit agency Moody’s cut Pakistan’s sovereign rating by one notch on October 6, citing increased liquidity and external vulnerability risks caused by the floods’ economic impact, in a decision strongly contested by the government.

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Economists have said Pakistan will have to explore all options to raise and save on its foreign reserves, which have fallen to around one month of imports that consist largely of oil and gas purchases.

Asked if Pakistan might turn to cheap Russian oil, Finance Minister Ishaq Dar told reporters: “We’re definitely considering it. If India is buying oil from Russia, we also have a right [to do so].”

The Group of Seven richest economies has been trying to enforce a price-capping mechanism on Russian oil exports by December 5, when European Union sanctions banning seaborne imports of Russian crude come into force.

Prime Minister Shehbaz Sharif has appealed for debt relief from the Paris Club, but Dar said on Wednesday that Pakistan would not seek a restructuring from that group of creditor nations, and neither would it default.