Tag: loan deal

  • PM Shehbaz confident of positive outcome in IMF loan talks

    PM Shehbaz confident of positive outcome in IMF loan talks

    Pakistan and the International Monetary Fund (IMF) are on the verge of finalising a long-awaited loan deal, according to Prime Minister Shehbaz Sharif. In an interview with Turkish news agency, the premier expressed hope that the ninth review by the IMF would align with all the terms and conditions, leading to positive news this month.

    Prime Minister Shehbaz Sharif said that Pakistan has diligently fulfilled each and every requirement set by the IMF as prior actions. The country’s commitment to meeting these obligations demonstrates its determination to address economic challenges head-on.

    However, in the event of the IMF talks falling through, the prime minister assured the nation that Pakistan possesses the resilience and fortitude to overcome any obstacles. He drew attention to the fact that the people of Pakistan have faced and triumphed over numerous challenges in the past. If necessary, they are prepared to tighten their belts and rise once again. Shehbaz Sharif credited the government’s ability to navigate these difficulties to the unwavering support of the Pakistani people and the assistance of brotherly and friendly nations.

    Highlighting the close bilateral relations between Pakistan and Turkiye, the prime minister described them as “one soul, two hearts that beat together.” He took the opportunity to congratulate the people of Turkiye on President Erdogan’s re-election, considering it a “wonderful development.” The deep bond between the two nations sets the stage for enhanced cooperation in the near future.

    PM Shehbaz Sharif outlined plans for Pakistan and Turkiye to strengthen their collaboration, particularly in the areas of biogas, solar energy, and hydropower. By focusing on these sectors, both countries aim to bolster trade and achieve mutual growth. The emphasis on renewable energy sources aligns with the global trend towards sustainable development and underscores the commitment of Pakistan and Turkiye to fostering a greener future.

    As Pakistan and the IMF move closer to finalising the loan deal, there is renewed hope for the country’s economic stability and growth. The government’s determination to meet the IMF’s requirements and the unwavering support of the Pakistani people serve as strong foundations for overcoming challenges and securing a brighter future. Furthermore, the prospects for increased cooperation with Turkiye in key sectors pave the way for mutually beneficial partnerships and contribute to regional progress.

    With anticipation building, all eyes are now on the impending announcement that will mark a significant milestone in Pakistan’s economic journey. The successful conclusion of the loan deal will not only provide much-needed financial assistance but also serve as a testament to Pakistan’s commitment to reform and progress.

  • Pakistan moves closer to finalising oil deal with Russia as team arrives in Karachi

    Pakistan has taken a step forward in its efforts to secure a loan deal with Russia, as a delegation has arrived in Karachi to finalise a crude oil deal with Pakistan State Oil (PSO). However, the Energy Ministry has not yet revealed the payment method or the discount rate for the crude oil prices, keeping it confidential for now.

    Technical teams from the Operational Services Centre held talks with the PSO team last month, but progress was not made on the constitution of a Special Purpose Vehicle responsible for importing crude and making payments. The Russian delegation is now in Pakistan to finalise the government-to-government agreement, including the mode of payment. Pakistan wants to pay in rupee, while Russia is asking for payment in China’s Yuan or Ruble. Once the deal is done, Pakistan will place an order with Russia for crude oil purchase.

    According to sources, the Russian ship will arrive in mid-May, and the current Brent price in the international market is $85.16 per barrel, while Russian oil is available at $47-48 per barrel. The State Bank of Pakistan (SBP) is asking local banks to open letters of credit for importing Russian oil, but they are hesitant to do so mainly because of the G7 countries’ regulations of following the price cap of $60 per barrel or below it and making payments under Society for Worldwide Interbank Financial Telecommunications (SWIFT) arrangement.

    PSO has never imported crude oil before, and refineries have been importing crude under long-term agreements from ADNOC and Saudi Aramco. However, in the case of Russian crude, refineries will not be involved in the import, but it will be an SPV with representatives from PSO and PSC. Pakistan may get Russian crude price with a discount close to $50 per barrel, $10 per barrel below the cap price imposed by G7 countries on Russian oil in the wake of the war on Ukraine.

    One of the top officials in the coalition government suggests that the decision to import Russian crude under the government-to-government agreement at a 30 per cent discount may not provide the required relief as shipping and refining costs will erode the maximum discount. Additionally, Pakistan refineries will only be able to extract 10 per cent MS out of Ural crude and 50 per cent furnace oil.

    The government needs to conduct a commercial analysis to determine if importing Russian oil will benefit Pakistan’s economy and to what extent. Industrial sources suggest that the government should evaluate the economic benefits of importing Russian oil carefully.