Pakistan seeks $3.6bn Saudi oil on deferred payment

ISLAMABAD: Pakistan is negotiating with Saudi Arabia to enhance an oil facility on deferred payments facility to $3.6 billion from an existing $1.2 billion, a spokesperson at the Petroleum Division said.

Saudi Arabia agreed to provide a $4.2 billion support package to Pakistan, including a $1.2 billion oil loan facility, during a visit of former Prime Minister Imran Khan to Riyadh in October last year.

“We are trying to take our existing facility with Saudi Arabia from $1.2 billion to $3.6 billion,” Syed Zakria Ali Shah, joint secretary of international and joint ventures at the Pakistani petroleum division, told Arab media.

Under the existing Saudi oil facility, Pakistan gets $100 million worth of oil on deferred payment every month. “When it was negotiated the oil prices were low but due to exponential rise in it, we are negotiating with Saudis to enhance the oil facility from $100 million to $300 million per month.”

Shah said Saudi Arabia was also helping Pakistan utilise another existing oil financing facility with the International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) group.

“The government of Pakistan has this facility for oil and liquefied natural gas (LNG) imports under the framework agreement with ITFC since 2017-18 and the last framework agreement was signed for this facility between the our economic affairs division and ITFC on February 21, 2022,” Shah said.

“It is a total $4.5 billion facility for three years from 2022 till 2024 which is around $1.5 billion annual on the best effort basis,” the official added.