Islamabad: The government of Pakistan is hailing the country's first Russian oil imports as a game-changer for the nation's faltering economy, but analysts emphasise that it is still too early to estimate how much the secret deal will contribute, reported Nikkei Asia.

On Sunday, a ship docked at the port of Russian oil imports with the equivalent of around 3,30,000 barrels of Russian crude oil. Next week, a different vessel with a little bit more oil is anticipated. Shehbaz Sharif, the prime minister of Pakistan, referred to the imports as transformative for the nation.

He tweeted, "This is the first-ever Russian oil cargo to Pakistan and the beginning of a new relationship between Pakistan and the Russian Federation," as per Nikkei Asia.

Nikkei Asia provides coverage of Asian news and analysis to a global audience.

In a test run, Pakistan Refinery Limited (PRL) will process the Russian oil. The refinery will provide the government with a report on the oil's technical and financial feasibility. However, even before that procedure is finished, the administration is emphasising the advantages for Pakistanis who are sick of inflation.

Musadik Malik, Pakistan's state minister for petroleum, told local media that the price of fuel will significantly drop once Pakistan begins importing Russian oil on a regular basis. Malik asserted, without going further, that Islamabad had secured a favourable rate from Moscow on the transactions.

Nearly 80 per cent of Pakistan's oil demands were met by imports in the fiscal year 2022-2023, which cost roughly USD 13 billion. However, it has suffered from the inflationary pressures brought on by Russia's invasion of Ukraine, along with other rising countries, and this has been made worse by internal political turmoil that has occasionally descended into violence.

As time runs out on a loan agreement that ends on June 30, Pakistan is rushing to secure frozen bailout funds from the International Monetary Fund. Hopes for that appeared to be further faded this week when Esther Perez Ruiz, the resident representative of the IMF for Pakistan, told the media that the country's budget for the upcoming fiscal year "misses an opportunity" to increase the tax base, though she added that the lender was still willing to cooperate with the administration.

In the meantime, Western allies have sanctioned Moscow because of the conflict. However, Pakistan's arch-enemy India has taken advantage of the chance to purchase cheap Russian oil with no response, and Islamabad is now banking on following a similar path.

Yet the benefits may not be so easily extracted.

Aftab Zafar, an oil adviser in Islamabad, is concerned that any price reduction on Russian oil that Pakistan receives will be outweighed by increased transportation expenses. Additionally, Russian oil yields are higher for furnace oil than for diesel, which does not adequately meet Pakistan's needs, according to Nikkei Asia.

Another question is specifically how Pakistan is paying Moscow for the oil. Amid severe pressure on the nation's foreign reserves, Petroleum Minister Malik disclosed that Islamabad is paying in Chinese yuan, a departure from the custom of paying in dollars. What arrangements have been taken to make the transactions easier to complete are not known, though.

The government is increasing its supply of liquefied petroleum gas (LPG) as it welcomes the arrival of Russian oil. Ten containers carrying 5,000 tonnes of LPG arrived on Wednesday from Uzbekistan via Afghanistan at the Torkham border crossing in Pakistan. Another 10,000 tons of LPG from Russia and 5,000 tons from Turkmenistan are reportedly on their way to Pakistan via Afghanistan.

Pakistan stated on Thursday that it would purchase one load of liquefied natural gas from Azerbaijan each month at a discounted price, though the volume has not yet been specified.

Abdul Rehman, a capital markets and energy expert based in Lahore, termed this a positive development for energy security. He said, "It is a take-and-pay deal with no commitments attached," Nikkei Asia reported.