Pakistan to import Saudi oil on deferred payment for one year

ISLAMABAD: Pakistan has signed an agreement with the Saudi Fund for Development (SFD) worth $1.2 billion, paving way for import of Saudi oil on deferred payment for one year.

Prime Minister Shehbaz Sharif and SFD Chief Executive Officer Sultan Abdulrahman Al-Marshad witnessed the signing of two agreements worth $1.61 billion, further strengthening bilateral economic cooperation.

The premier welcomed the signing of the Oil Import Financing Facility according to which Pakistan would receive oil on deferred payment for one year.

"This project will strengthen Pakistan’s economic resilience by securing a stable supply of petroleum products while reducing immediate fiscal burdens," said a statement.

The two sides also inked a concessional loan agreement for the construction of a gravity-flow water scheme at Mansehra amounting to $41 million. The scheme is expected to benefit around 150,000 people living in the region.

Petroleum products, mostly from Saudi Arabia, make up the major chunk of Pakistan's import bill. The Saudi facility can help Islamabad boost its foreign reserves ahead of the first review of a $7 billion IMF bailout in March.

SFD delegation calls on premier

Following the ceremony, the SFD delegation called on the prime minister and shared updates about ongoing projects including Mohmand Multi-purpose Hydropower Project, Golan Gol Hydropower Project, Malakand Regional Development Project, and other projects funded through Saudi grants.

The premier welcomed the delegation and appreciated the long-standing friendship between Saudi Arabia and Pakistan and the efforts of SFD for providing financing to Pakistan in the fields of health, energy, infrastructure and education as well the for reconstruction after the 2022 floods.

PM Shehbaz, while appreciating the support of the SFD, highlighted the need to expedite the processing of the new projects, shared with SFD, in the field of green energy and infrastructure, which once implemented would go a long way in the economic revival of the country, besides serving the needs of the local communities.

The CEO, SFD assured early processing of the shared projects and also reiterated that Saudi Arabia, under the leadership of the royal family, would extend all possible assistance and continued support to Pakistan.