ISLAMABAD: Just a day after Russia claimed to have made its first Liquefied Petroleum Gas (LPG) delivery to Pakistan, the government distanced itself from the import, triggering a controversy over the shipment amid an energy crisis.

The energy ministry on Wednesday said Islamabad was ascertaining the facts after Russia’s embassy tweeted that Moscow had made its first LPG delivery to Pakistan. However, the ministry made it clear that the government did not import the fuel.

The Russian embassy posted on social media site X, formerly Twitter, late on Tuesday that 100,000 tonnes of LPG had arrived in Pakistan through Iran’s Sarakhs Special Economic Zone, and consultations on a second shipment were underway.

Energy imports make up most of Pakistan’s external payments and discounted fuel from Russia offers some respite as Islamabad faces an acute balance of payments problem, risking a default on its external debt.

Pakistan had received its first delivery of Russian crude under a deal struck between the two countries earlier this year.

In January, a Russian delegation arrived in Islamabad for talks to finalise the deal. During the three-day meeting, the countries decided to address all technical issues — insurance, transportation and payment mechanisms — to sign an agreement by late March this year.

“After consensus on the technical specifications approved, the oil and gas trade transaction will be structured in a way it has a mutual economic benefit for both countries,” a joint statement issued by the two sides said at the time.

In a statement sent to Reuters on Wednesday, the energy ministry said LPG being imported by private entities from Iran via a land route might be of Russian origin, adding that the government itself does not import the fuel.

The Russian embassy did not respond to an emailed request for comment.

Market, industry and official sources questioned the size of the consignment, however, saying such an amount of LPG was too much to have arrived by road and would have required around 4,000 containers to carry it.

An industry source in Moscow said LPG shipments from Russian plants, mainly owned by Gazprom, to Sarakhs between February and April totalled around 5,000 tonnes. “We don’t know which part of these 5,000 tonnes were delivered from Sarakhs to Pakistan,” the source said.

At the time of the crude deal, Moscow said Islamabad would need to make any LPG purchases via the Russian private sector.

Pakistan has said it had paid for the Russian crude in Chinese currency, but the value of the deal was never disclosed.

Published in Dawn, September 28th, 2023

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