The first shipment of discounted Russian crude oil has arrived at the port city of Karachi, Pakistan Prime Minister Shehbaz Sharif announced on Sunday, a development that is expected to provide relief to the people hit by skyrocketing inflation.

Pakistan, which is currently grappling with high external debt and a weak local currency, is hoping that snapping crude at discounted rates from Russia will stabilise oil prices in the country.

Petrol now costs Rs 262 per litre in the country as per the latest revision.

A cargo ship carrying about 45,000 metric tonnes of Russian crude oil docked at a port in Karachi.

“I have fulfilled another of my promises to the nation. Glad to announce that the first Russian discounted crude oil cargo has arrived in Karachi and will begin discharge tomorrow,” Prime Minister Sharif tweeted.

“Today is a transformative day. We are moving one step at a time toward prosperity, economic growth, and energy security & affordability,” he said.

Sharif added that this was the beginning of a “new relationship between Pakistan and the Russian Federation.” The deal will see Pakistan buy crude oil, not refined fuels, with imports expected to touch 100,000 barrels per day if the first transaction goes through smoothly, according to media reports.

In December 2022, Russia refused to provide Pakistan with a 30 per cent discount on its crude after the Pakistani delegation asked for a reduction in price.

A Russian delegation arrived in Islamabad in January this year to hold talks and settle technical issues such as insurance and mortgage.

In April, Pakistan placed its first order for discounted Russian crude oil under a deal struck between Islamabad and Moscow.

Energy accounts for the biggest share of Pakistan’s imports, and cheaper oil from Russia will help Pakistan in containing the ballooning trade deficit and balance-of-payments crisis.

Last year, Pakistan imported around 154,000 barrels per day, with around 80 per cent of its supplies coming from Saudi Arabia, the UAE and other Gulf nations.

During the week ending June 2, the total foreign exchange reserves in the country fell to around USD 3.9 billion, the State Bank of Pakistan data revealed.

Pakistan inflation rate accelerated to 38 per cent in May from the record high of 36.4 per cent in April, according to the central bank data.

The cataclysmic floods last year inundated a third of the country, displaced more than 33 million and caused economic damages to the tune of USD 12.5 billion to Pakistan’s already teetering economy.

Pakistan and the IMF have failed to reach a staff-level agreement on the much-needed USD 1.1 billion bailout package aimed at preventing the country from going bankrupt.

The funds are part of a USD 6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations.

Pakistan’s purchase gives Russia a new customer for its crude, apart from India and China.

Since the Ukraine war unravelled last year, the US and other Western nations have unleashed a series of crippling economic sanctions on Russia.