Home Latest News Russia Has Not Offered to Sell Cheaper Oil to Pakistan: Miftah Ismail

Russia Has Not Offered to Sell Cheaper Oil to Pakistan: Miftah Ismail

Finance minister claims he is confident of reviving suspended IMF program after tabling budget for the next fiscal year

by Newsweek Pakistan

File photo of Finance Minister Miftah Ismail

Finance Minister Miftah Ismail on Tuesday said that Pakistan is willing to buy cheaper oil and wheat from Russia if it does not invoke Western sanctions, but stressed that Moscow has not made any such offer to Islamabad thus far.

In an interview with CNN, he said that the previous government had written a letter to Moscow offering to buy cheaper oil. However, he clarified, Moscow had never responded to this letter. Referring to the Ukrainian conflict, he said Islamabad had approached both Ukraine and Russia and conveyed an interest to purchase what from whoever was willing to sell it. “Russia has also not offered us any oil and it is now under sanctions, so it’s very difficult for me to imagine buying Russian oil,” he said.

On the possibility of making payments in rubles, as Moscow has demanded of other states to avoid sanctions, the minister said Pakistan doesn’t have any rubles in its reserves. “I don’t know where I would get the rubles from. I guess I could exchange it with some other currency. But first Russia has to agree to sell us oil because they haven’t,” he said.

To a question on ousted prime minister Imran Khan’s claims that Russia had offered Pakistan a 30 percent discount on oil and wheat imports, he said this was untrue. “I don’t know where Khan gets his numbers from. But I know that he just makes up stuff as he goes along,” he said. “If Russia was selling him cheap wheat and oil then why didn’t he buy it?”

Discussing the government’s negotiations with the International Monetary Fund (IMF) to revive a suspended bailout program, the minister said that talks were ongoing and the global lender was examining the budget the coalition government would present in early June. “I am hoping that we will reach an agreement with the Fund [after that],” he said, adding that the IMF specifically wanted Pakistan to reverse subsidies on oil and electricity that had been announced by the previous government. “I am pretty confident that we should be able to get an agreement with the Fund but there would be some austerity in the budget, some measures to increase taxation in the next budget,” he said.

Describing the subsidy on petroleum products as a “trap,” Ismail said the ousted prime minister had used his last days in government to “violate all these agreements with the IMF, including giving these unsustainably high subsidies. And he knew we could not sustain this.” Now that Khan was out of power, said the minister, he was “going city to city, trying to rally the people with his theories about conspiracies and all that for putting a lot of political pressure on us.”

Admitting that the new government had found it difficult to raise prices immediately, he said the reduction of subsidies announced last week was a “very important” step.

On Pakistan’s ties with China, Russia, and Saudi Arabia, Ismail blamed former prime minister Khan for damaging Islamabad’s relations with Beijing. “He rolled back the China-Pakistan Economic Corridor. He also annoyed Saudis and the U.A.E. We are trying to improve relations with them as well and with all the Western countries as they are the biggest importers of Pakistani goods, along with the U.S.,” he added.

Responding to Ismail’s interview via Twitter, PTI leader Shireen Mazari claimed there were “no sanctions” on Russian oil imports and reiterated her party’s allegations of the incumbent government acting out of fear of the U.S.

Meanwhile, even as the finance minister expressed intent to withdraw all subsidies, the Finance Division issued a press release saying prices of petroleum products were being kept unchanged in the near-term on the directives of Prime Minister Shehbaz Sharif. It said the measure was being taken to “provide maximum relief to the consumers” despite the loss in revenue caused by globally high petroleum prices.

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