JHELUM: Finance Minister Shaukat Tarin on Friday announced that Saudi Arabia has agreed to provide oil to Pakistan on deferred payment, a day after the government hiked the price of petroleum products up to Rs8.82.
Addressing a ceremony in Jhelum, the finance minister said Saudi Arabia would provide $150 million to Pakistan on a monthly basis, and in two years, Riyadh would provide a facility of $3.60 billion to Islamabad. “This amount will be utilised to procure oil,” the finance minister said.
The Finance Minister, while speaking on the National Assembly floor on September 29, disclosed that an agreement for another Saudi oil facility on deferred payments had been reached and would be formally announced within two to three days.
“They are not only considering another oil facility on deferred payments but an agreement has almost been reached that would hopefully be made public in two or three days,” Mr Tarin said while testifying before the National Assembly in response to a question.
During Question Hour, MNA Maulana Abdul Akbar Chitrali raised a supplementary question on a written reply to his question as to why there had been coldness in bilateral relationship with Saudi Arabia after its $1.5 billion assistance for Pakistan Development Fund in 2013-14.
In response, Mr Tarin said Saudi Arabia had given a big package to Pakistan that included oil supplies on deferred payments and cash. “They provided us $5bn in cash and took it back slowly, slowly. As we speak, Saudi Arabia is considering another oil facility on deferred payments on request to absorb the impact of rising oil prices in the market,” he said
Back in May, Federal Minister for Information Fawad Chaudhry had said Saudi Arabia had agreed, in principle, to revive the facility of oil supply to Pakistan on deferred payments.
The prime minister, on his visit to the kingdom earlier this year, had made a request to Saudi Arabia to resume the supply of oil to Pakistan on deferred payments for an extended period.
Earlier, Saudi Arabia had provided a $6 billion financial package, including $3 billion deposits into the State Bank of Pakistan, and the remaining $3 billion for oil facility on deferred payment on an annual basis.
The previous oil facility from KSA was signed for three years during the visit of Saudi Crown Prince Mohammad Bin Salman to Pakistan. This facility was made operational from July 2019 with the understanding that the first-year bill would be paid on monthly basis and then second-year oil would be obtained on deferred payment.
So, this whole facility would end in the fourth year upon the maturity of getting oil for the third year. It was assessed at that time that Pakistan would require a $275 million oil facility on monthly basis from the KSA, so it accounted for $3.2 billion on a per annum basis for a three-year period.
