Pakistan to import 32.7 million barrels oil under SFD programme

ISLAMABAD: Pakistan will import around 32.7 million barrels of crude oil, during the year 2022, under an agreement signed with the Saudi Fund for Development (SFD) to meet its needs of petroleum products on deferred payment.

The Pak-Arab Refinery Company Limited (PARCO) and National Refinery Limited (NRL) are planning to import 16.89 and 15.81 million barrels of oil in the year 2022 respectively, according to an official document available with APP.

As per the agreement, the crude oil worth $100 million per month for one year could be imported on deferred payment.

“The price will be as per existing long term agreements/contracts between Saudi Aramco, PARCO and NRL,” it added.

The SFD programme is operative since March 7, 2022 and accordingly, the procurement of oil has commenced.

“The facility will be available for a 12 months period which may be extended for 1 year upon the consent of the parties."

Repayment of the withdrawn amounts plus the margin at the rate of 3.8 percent shall be made in one annual installment in US dollar.

The Saudi government had agreed to provide a $4.2 billion economic support to Pakistan in June 2021 and then formally signed an agreement in November.

The economic package included $3 billion foreign exchange deposit in Pakistan’s account and $1.2 billion in oil supplies at the rate of $100 million per month at an interest rate of 3.8 percent — higher than the previous rate of 3.2 percent.

The financing agreement for the oil facility was signed last November between the Saudi Fund for Development (SFD) and the Pakistani Economic Affairs Division.

The interest rate on SOF is almost 1 percent higher than that of 2.8 percent by International Islamic Trade Finance Corporation, a subsidiary of the Islamic Development Bank, which is providing $4.5 billion worth of three-year trade finance for oil, gas and fertiliser imports at the rate of $1.5 billion per annum

Meanwhile, a senior official privy to petroleum sector developments told APP that the government had given the exploration and production companies, operating in Pakistan, a target to produce around 29 million barrels crude oil during the current fiscal year. The companies had produced 27 million barrels of oil in 2020-21, he added.