business
Monday Jun 27 2022
By

Pakistan seeks enhancing Saudi oil facility to $3.6bn on delayed payment

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. — Reuters/File
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. — Reuters/File

  • Under existing Saudi oil facility, Pakistan gets $100 million worth of oil on deferred payment every month.
  • Saudi Arabia also helps Pakistan utilise another existing oil financing facility with ITFC.
  • Pakistan avails $4.2b support package, including $1.2b oil loan facility agreed by Saudi Arabia last October.


Pakistan is pushing Saudi Arabia towards enhancing the oil facility on delayed payments facility to $3.6 billion from the existing $1.2 billion facilty, The News reported Monday, citing a petroleum division spokesperson.

The oil-rich country agreed to provide Pakistan with a $4.2 billion support package, including a $1.2 billion oil loan facility in October last year, when former prime minister Imran Khan visited Riyadh.

“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.