Oil supply, on deferred payment, begins from Saudi Arabia

ISLAMABAD: Pakistan will start receiving oil from Saudi Arabia on deferred payments this month (July 2019), as the Kingdom’s embassy in Islamabad on Monday released a press release confirming that Pakistan is due to begin receiving oil supplies from Saudi Arabia under this arrangement to the tune of $9.9 billion over the next three years.

“Pakistan will start receiving monthly oil supplies worth $275 million from Saudi Arabia with effect of July 1, 2019,” the embassy said in a notification. “These supplies will continue over the next three years, with a total value of $9.9 billion,” it added. This support from the brotherly Muslim country would help staving off the balance of payment issue to some extent and also ease the oil import bill.

Pakistan’s petroleum group imports including crude and Liquefied Natural Gas (LNG) during July-May 2018/19 was recorded at 13.135 billion that included petroleum products import of $5.65 billion, crude oil of $4.19 billion and LNG of $3.057 billion. In Fiscal year 2017/18, total petroleum group imports were huge $14.43 billion.

It is worth mentioning that in last October Saudi Arabia had announced an economic support package for Pakistan which included three billion dollars for supporting balance of external payments. Moreover the package included oil imports on deferred payments. The agreement concluded between the two sides reached a total amount of 20 billion dollars.

The statement said, “This package expresses the keenness of the Saudi leadership to support the Pakistan economy for achieving financial stability and help the government to overcome the economic challenges and push the comprehensive development in Pakistan, and to emphasize the depth of relations between the two brotherly countries and people.” Saudi Arabia through its Aramco Company would supply 110,000 barrels/day crude oil to Pakistan’s state-run Pak-Arab Refinery and National Refinery for refining, official said.