Saudi Arabia to provide $3.6 billion over two years as part of oil facility: Tarin

JHELUM –  Federal Minister for Finance Shaukat Tarin announced on Friday that Saudi Arabia has agreed to provide oil on deferred payment to Pakistan, a day after the government hiked the price of petroleum products up to Rs8.82.

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.

Two days earlier, while addressing the National Assembly, the finance minister said that Pakistan had requested Saudi Arabia after the rise in global crude oil prices. “The oil supply agreement with Saudi Arabia is nearing completion,” he added.

“This amount will be utilised to procure oil,” the finance minister said.

The prime minister, on his recent visit to the kingdom in May, had made a request to Saudi Arabia to resume the supply of oil to Pakistan on deferred payments for an extended period.

Following the visit Federal Information Minister Fawad Chaudhry confirmed that a deal was “almost done and details would be shared soon”.

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.

The IDB had also agreed to provide $1.5 billion oil facility on deferred payment, so in totality there was a provision of $4.7 billion oil on deferred payment.

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