PKONWEB — Pakistan will start receiving Saudi oil on deferred payment facility from July 1, a press statement from the Saudi embassy in Islamabad confirmed late Monday.
“Pakistan will start receiving monthly oil supplies worth $275 million from Saudi Arabia with effect of July 1, 2019,” the embassy said in a statement.
These supplies will continue over the next three years, with a total value of $9.9 billion, the statement added.
The facility is part of $20 bn Saudi economic support package for Pakistan which was announced in October 2018. The assistance included $3 billion to support balance of external payments in addition to oil import facility on deferred payment.
Dr. Vaqar Ahmed Joint Executive Director at Sustainable Development Policy Institute (SDPI), an Islamabad based think-tank, told Arab News, “this will bring significant relief to the balance of payment situation in Pakistan,” which is already struggling to narrow down the current account gap. “Any arrangement which can allow Pakistan deferred payment of its oil supplies will certainly be welcomed.”
“This will also provide certainty to the industry which of course requires sustained oil supplies as input and raw material,” Ahmed added calling the move “a great help for Pakistan in pressing times.”
According to official figures, Pakistan spends more than $16 billion each year on importing 26 million tons of petroleum products, including 800 million cubic feet of Liquefied Natural Gas (LNG) from Saudi Arabia, the UAE and other Gulf countries.
Thr kingdom in February 2019, signed several agreement and memoranda of understandings (MoUs) pledging to invest $20bn in Pakistan to boost its depleting foreign exchange reserves — including establishing a $10bn oil refinery in the port city of Gwadar in Balochistan province.
