ISLAMABAD: Finance minister Shaukat Tarin informed Pakistan’s Senate on Friday the country would start using from next month a $1.2 billion Saudi facility allowing Islamabad to defer payments for oil imports.
A $4.2 billion Saudi support package, which included a $1.2 billion oil loan facility, was agreed during Prime Minister Imran Khan's visit to Riyadh in October last year. In December, Pakistan received the $3 billion loan but the oil facility is yet to be put into use.
The South Asian nation is facing a wide range of economic challenges, with high inflation, sliding forex reserves, a widening current account deficit and a depreciating currency.
“We went to Saudi Arabia and told [its government] that oil prices are rising so give us [oil] on deferred payments,” the finance minister said. “We have not used the deferred payment facility until now. We will use it from next month.”
Tarin said Pakistan had been using its own reserves at the moment.
Saudi Ambassador to Islamabad Nawaf bin Said Al-Malki met Pakistan’s federal minister for economic affairs, Omar Ayub Khan, last week to discuss the facility. The two had agreed to operationalize the oil facility at the “earliest.”
The financing agreement for the oil facility was signed last November between the Saudi Fund for Development (SFD) and the Pakistani Economic Affairs Division.
“As per Financing Agreement, the SFD will extend the financing facility up to $100 million per month for one-year for purchase of petroleum products on deferred payment basis,” a statement from Pakistan’s Ministry of Economic Affairs had read.
Pakistan to start using Saudi oil facility next month — finance minister
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Pakistan to start using Saudi oil facility next month — finance minister
- $4.2 billion Saudi package, including $1.2 billion oil facility, was agreed during PM Khan’s visit to Riyadh last October
- Pakistan is facing a wide range of economic challenges, including high inflation, sliding forex reserves and a depreciating currency
