Dependent on energy imports, Pakistan faces an energy crisis.
The need is so great that the country joins the list of countries moving away from US dollar trading.
According to a report, an Energy Ministry official has hinted that the country could use the Chinese yuan to pay for Russian crude.
The Chinese yuan is becoming increasingly important in international payment transactions – including in transactions involving China is not involved.
Pakistan is considering using the yuan
The economically and politically shattered Pakistan is the latest country to use the Chinese Currency for international payments for russian considering oil. Islamabad is considering the new payment method for Pakistan’s first Russian crude oil order over 750,000 barrels due to arrive in the first week of June, reported “The News International“, a well-known English-language daily newspaper, last Friday.
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“Pakistan will receive the award for that crude oil most likely pay in Chinese currency yuan,” an anonymous official from Pakistan’s Energy Ministry told the newspaper. The official declined further comment on the price of the crude oil shipment.
In the past few weeks, the country has indicated that it intends to buy Russian oil. Pakistani Oil Minister Musadik Malik told the news agency Reuters in April that Pakistan would eventually import around 100,000 barrels a day of Russian crude oil if the first transaction went smoothly.
A number of other countries are already using the Chinese currency
The South Asian country’s potential switch to the yuan comes at a time when where countries around the world look for substitute currenciesto like with either heavily sanctioned countries Russia to engage in trade or to hold political leverage.
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Pakistan’s purchase of Russian oil also finds against the background more comprehensive sanctions against Moscow as a result of invasion of Ukraine instead of. Although the Trade restrictions have impacted Russia’s energy sector revenuesthe energy giant was still able to raw materials at discounts to opportunistic buyers like China and India for sale.
Economically troubled countries like Pakistan and Sri Lanka have joined the queue of those who want to buy Russian energy sources at a reduced price. The Russian flagship, the Uralcrude oilis currently trading at a discount of around $20 a barrel to both benchmarks, US and Brent Crude Oil.
Economic and political tensions are putting Pakistan under pressure
Pakistan has been in an economic crisis since last year, triggered by a rapidly rising Inflationone continued devaluation of the currency and low foreign exchange reserves. All these factors make the country’s solvency more difficult around 80 percent of its needs of crude oil and refined petroleum products.
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The South Asian country is in such dire straits that it sought a rescue package from the International Monetary Fund. In addition to the economic problems, Pakistan is in a political crisiswhich after the Arrest of former Prime Minister Imran Khan tightened on Tuesday.
The Pakistani Energy Ministry initially did not respond to a request from Business Insider.
This article has been translated from English. You can find the original here.