All rhetoric of brotherhood notwithstanding, two ‘friendly’ Arab countries have refused to supply oil to Pakistan on long-term credit.
Plagued by circular debt, and faced with high international oil prices, Pakistan had requested Kuwait and Saudi Arabia to extend their credit term for oil payments.
During his two-day visit in August last year, Prime Minister Yousaf Raza Gilani had requested Saudi King Abdullah bin Abdulaziz to either restore ‘free oil facility’ or extend the credit term for oil payment from the existing 30 days to one-year.
Saudi Arabia had granted Pakistan a ‘free oil facility’ in 1998, in the aftermath of the nuclear tests and subsequent economic sanctions from the United States and Europe.
“Saudi Arabia has turned down Pakistan’s request on grounds that since it exports oil to other countries, they may demand similar treatment,” said sources, quoting Saudi officials.
Saudi authorities also said that oil export is a commercial business for them and they would offer Pakistan the same terms that are offered to other countries, sources added.
Pakistan had also requested Kuwait to extend its credit terms for oil payments to six months, from the current two-month deferral period.
A formal request in this regard was made during President Asif Ali Zardari’s visit to Kuwait on May 7, 2011. At that time, Kuwait said it would discuss the matter with concerned authorities and let Pakistan know later.
Kuwait is the only country that supplies oil to Pakistan on a two-month deferred payment plan, an arrangement secured during the 2008 financial crisis. Other Middle Eastern countries, including Saudi Arabia, export oil on 30-day credit term.
When contacted, however, Petroleum Minister Dr Asim Hussain said he had no knowledge of such requests.
Earlier, Iran had been supplying 45,000 barrels of crude oil to Pakistan on a three-month deferred payment plan until January 2011. UN-imposed sanctions, however, brought a halt to these due to difficulties in opening Letter of Credits from global banks for oil imports from Iran.
Since then, Iranian oil is largely smuggled to Pakistan. Officials say people of Baluchistan meet most of their requirements with smuggled oil.
Cash crunch at PSO
With almost Rs200 billion due to pay local and international fuel suppliers as of January 6, 2012, the largest public sector oil marketing company, Pakistan State Oil (PSO), is in dire straits.
Of that amount, PSO owes almost Rs114 billion to international fuel suppliers, including Kuwait Petroleum Corporation (KPC). “PSO is facing an emergency-like situation and has no money to pay for oil supplies,” sources said.
“The situation has been aggravated due to nonpayment of dues by power sector and some other clients; PSO’s receivables have piled up to Rs185.2 billion,” sources added.
The company is mainly dependent on oil imports since oil refineries in the country are operating at 70% capacity due to circular debt, sources added.
Published in The Express Tribune, January 9th, 2012.
COMMENTS (134)
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Time to start claiming a chinese lineage now.
why should we expect special treatment just basing on religion. Its business and just that! How would a businessman forgo profit for his brother, not justified to expect that from them. I do not know for what use are we for them, we don't produce something and there is nothing in our economy for them as well. I support their refusal, as it may give us a wake-up call to stand on our two feet and stop begging. If we are not ashamed to ask, why should they be ashamed to refuse.
This is conspiracy of America, israil and india.
Sorry Holy Brother!
Muslim Brotherly Love?? Just go to Dubai or Saudi Arabia and see the condition of those expatriate workers (Slave labour??), who don't get paid for months, live in the most abhorrent conditions and whose passports (Which are the property of the Government of Pakistan) are confiscated upon arrival. Muslim Brothers indeed! Makes me want to laugh!!
@CaptainCookesPeerSahib:
You remind me of a beggar who won a car in a lottery. When asked what he would do the car, he replied, "Why? I will beg sitting in the car from now on!"
@Sikander: Alexander the great!!! do you know who is Alexander the great??? - also you can claim who ever you want but the reality is we are from a third world country begging oil from some one claiming we are your brothers and they rejected our claim, by the way even the nomad Arabs are not accepting us their brothers and now you are saying we are the descendants of Romans(Alexander)!!!, I believe after some days you may even call we are the descendants of Aliens!!!
@Sikander: Alexander the great!!! do you know who is Alexander the great??? - also you can claim who ever you want but the reality is we are from a third world country begging oil from some one saying we are your brothers and they rejected the claim, by the way even the nomads Arabs are not accepting as their brothers and now you are saying we are the descendants of Romans!!!, I believe after some days you may even call we are the descendants of Aliens!!!
How about sending some of the strategic assets to KSA and Kuwait, Mumbai style. By the way I haven't seen any protest march and flag burning yet.
similar thing happened last year when the Pak was asking for financial aid from the Saudi's they said no, then they went to China even they said no and finally the Americans helped them..I don't think pakistani's shy away from it, that there countrt only survives on aids..some of the comments clearly state that ...World beleive it or not Pakistan made a nuclear bomb on their own...!!! hahaha only pakistani beleive that..
How did PSO has a due of Rs200 billion(more than 2 billion dollars). Here it is.. - Approx Cost of 1 infrastructure for building Nukes = Rs 90 - 100 billion (more than 1 billion dollars) - Approx cost of 1 nuke weapon = Rs 4.5 billion (50 million dollars) - Approx cost of 25 nukes = Rs 112.5 billion (more than 1 billion dollars) Considering Pakistan at least has 25 nukes(could be more than that), total cost will sum upto more than Rs 200 billion.Just diverted the national budget money to defense instead of repaying the debt.
No worries, they ll come back to us for help. How do you think Bahrain is surviving? Pakistanis are holding back the protesters. How did Kuwait survived during Gulf War. All the eight countries could not survive the six day war against Israel without Pakistani forces..
Secondly if this helps pakistan to strive and get self sufficient then its for our own good.
@enlightened_dude: They keep installing and somehow they are thrown out.
If Pakistanis claim their lineage as Latin, then Hugo Chavez could be persuaded to send you a free oil tanker or two. He too needs friends.
When old brothers don't respond, then try making new brothers.
@Sajid Ali: Because you pay in pakistani rupees while your country will have to pay in $. Since there are no exports there is no inflow of Forex , hence the problem.
@Hu Jintao: All weather friend china is always there. Don't worry, be happy...
@A. Khan: Kayani?
@Yuri Kondratyuk: Pakistan can proudly stand and walk around but can't drive around without oil.
I am really really curious if this was reported in the Urdu newspapers. Can someone please tell me if it was?
Another example of Pakistans dependency on foreign countries for the sustenance of its most essential needs. Energy, and water are issues that require bold action, not embarrassing requests such as this.
I don't know about Kuwait but saudi arabia's security is guaranteed by pakistan armed forces. The saudis should show more loyalty since pakistan protects the ruling family there from their own people. Free oil is a small price to pay for that.
and we have made IRAN our ( NOT FRIEND ) just because of KSA !!!!!!!!!! We should open our eyes and trade and share with IRAN, who is isolated at this stage, but can and is still willing to help Pakistan !!!!!!
What a joke. Now Pakistanis are not Arabs but from Central Asia. Read history. Ever heard of forced conversions? How did Iran and Afghanistan become muslim countries? How did a large part of the Indian sub-continental population become muslim? Ever heard of Aurangzeb? Instead of being proud of a heritage of 5000 years of civilization, you want to be derived from wild nomadic tribes? Then you wonder why KSA treats Pakistanis the way they do? Do you read in this paper what happens to Pakistani's when they go to KSA for hajj?
@Hu Jintao:
"India does need Pakistan for its trade to CAR states."
Just to state facts, that is not a correct statement. India has been doing business with CAR's through Chabbahar port in Iran and then onward through a newly built roadway all the way to afghanistan and CARs.
Of course, it would be a little cheaper directly through Pakistan, but geopolitics negate that possibility at least for the time being.
@Sajid Ali:
"I cant understand why PSO cant pay the money? I mean we pay every paisa to petrol station while we fill our cars tank then why PSO is unable to pay its debts? "
First, you are required to pay in hard currency and not rupees. To earn hard currency, you have to export goods and services and not "strategic assets". The strategy of blackmailing the West using "if you don't support us, the terrorists will take over the nuke" threats worked well for the past nine years miliking the Americans for $30B. But, that tap has now been turned shut.
No more aid for loot and plunder by Govt including military.
@muhammad aziz:
"what happened to the muslim love between the two brotherly countries? our fellow muslim brothers are not willing to help us out.then why do we accord such special treatment to them? why do their proxies in pakistan go into fits of rage whenever they are rightly criticised?"
Why should a brother be helped if he lives irresponsibly, above his means, spends on wrong priorities and constantly begs for money and freebies? Why can't the brother re-arrange his lifestyle to fit within his own means, set priorities, make sacrifices or work hard to earn more money?
**Hey,why not borrow from messrs Zardari and Mian Nawaz? They have billions stashed away in Swiss banks which were essentially stolen from poor Pakistani people.
What else were we expecting when we turned down the American request to sanction Iran? Americans and the middle eastern puppets!
Is this professional reporting? Was it really Nessesscary to add drama by highlighting how they are our Muslim brothers? Typical Pakistani aunties talking over tea style.
Pakistan's brotherly countries refuse Pakistan because of Pakistan's own problems, and in order to help Pakistani brothers stand on their own feet. Other countries conspire to hurt Pakistanis.
let's see:- 1.Pakistan is an Islamic nation. check 2,Saudi Arabia is an Islamic nation. check 3.Islamic laws forbid interests. check 4.Pakistan had requested Kuwait and Saudi Arabia to extend their credit term for oil payments. check. 5.None of the poster are saying Saudi Arabia/Pakistan are doing wrong by indulging in Non-Islamic Practice. Check.
Problemo???
Who would like to lend money to a country run by a crook ?
The present so called democratic dispensation has brought Pakistan to the precipice & now is the steep fall!! Can someone save us??
Brotherly nations are waiting for dictatorship to return to power in Pakistan then they will open their wells of wealth. No brotherly nation likes democracy in Pakistan as it makes it complicated and brotherly countries can not get away with their interests in the country easily that way.
Pakistan must understand that there are no free lunches in international trade and in the present times not even between two real brothers. However, the most alarming scenario is that how would the country run without oil ??
This should be a sign that Pakistan shouldn't be more Catholic than the Pope viz-a-viz supporting this horrible regimes in the middle east. We should try and improve relationships with Israel. Why can Egypt, Jordan and Turkey have diplomatic relationships with Israel and Pakistan can't? The best thing that could happen to the world is the liberation of the people in the KSA.
It is time to look for some "Sisterly Country". Don't forget that these brotherly countries are totally under the influence of USA so better contact "Mother-in-Law" Madam Hillary Clinton.
Latest research shows Pakistanis to be of Arab-=Chinese descent.
Lol
Thanks to our brotherly countries on not giving us aid or credit. the more they will give us credit the more govt will loot, nothing will come to nation and the looted people will run from the country and credit will remain on nation shoulders, why don't we dig our our resources we have everything look at thar coal and alot more.
This after the Pakistani's claims of Arab descent. Apparently oil ins thicker than blood.
Every country is following their own economic and trade policies. It is natural that everyone first secures him (or her) self first then takes care about others. International trade and restrictions are being announced from time to time depending mutual interest and benefit.
The present situation may be accepted as a CHALLENGE and should prove a blessing in disguise.
Standing and walking at your own feet is better or always to remain dependent? APNA HAATH JAGAN NATH please.
@Hu Jintao
Yeah that will show them -- while you at it you might as well show off the camels,air balloons or whatever you plan on using to deliver your nukes.
Muslim-hood bubble? What bubble? What Muslim-hood? What are you on about?
Extending current LCs to year long LCs would mean Pak Govt. is open to exercise SLAs without repaying in near future. By enabling Pak Govt. to import petroleum on such terms would allow govt. to make enough taxes to survive till next elections and leave the next Cabinet with debt crisis.
I am happy to see a sensible decision by Sheikhs. Let me tell you why.
Who would want to risk capital where the returns would not even cover risk premium? As it is Pak Govt. has not been able to match payment schedule. In such difficult global crisis, no one in right state of mind would want to extend LC to a client with consecutive falling credit ratings over last three years.
Truth be said, who knows in a year's time if any currency would hold any credibility. Kudos to you Al-Sauds' and Al-Sabahs' . . .
@Sikander I think you must be right because Greece is also on the verge of bankruptcy!
@M: India does need Pakistan for its trade to CAR states.
Well lets just eveybody hope that thi don't link this to conspiracy against God forsaken the BHUTTTOOO thing they always bring in and brag about.
@Sikander: Mr genius Punjabis Sindhis Seraikis Baloch r not Mongol or Greek/Macedonian. Mr even now many have Hindu surnames. Randhawa Warraich Choudhary most of these surnames r Hindu/Sikh. U r more naive than a 5 yr old kid
@Sikander: wrote @Stupid man – Pakistanis are neither Arab or Indian descents. Genetically we Pakistanis are ‘Mongols’ and ‘Alexander the Great’ descendents. Your name exactly descibes you!
So your name Sikander makes you a decedent of Alexander .. I am not sure who is the Stupid man here ...
when a wife doesn't treat her income less husband , How come brotherly nations will help u ? It's Economy stupid ?
@Sikander: The Arabs themselves have debased your theory, so now you are weaving another fantasy that your lot descended from central asians.
@Sajid Ali: Simple. The politicians & army siphons robs the common man to support their lavish lifestyles.
this reminds me something i learned in my younger age . Ya sheikh apni apni dekh
@Hu Jintao: India has no need for Pakistani trade. It is the other way around
@Moise: So was Pakistan
The Arabs, always keep pace with their masters and we must avoid them and better they should be ignored in every aspect of the affair .
@Ali .. wow I thought you would protest and burn flags of KSA and Kuwait which you would have certainly done if it was ¨amrika¨ or ¨burtania¨ .Pay your taxes in time, that will help you.
Need not reply , Sikernders are getting appropriate dose on this blog itself .
I believe Pakistan had sent a contingent to help liberate Kuwait during Gulf War I. Brotherly love repaid?
@Amarr:
Agree with you. Must be the reason India's exports to other countries are growing and its economy is booming.
But, you absolutely have great point thougth.
What a slap in the face of stupid Pakistanis who make cause of every muslim their cause instead of taking care of the injustice carried out against Pakistanis by other Pakistanis.
"Brotherly countries"! ----- sound familiar to me, isn't it just continuation of our history (very muslim indeed!) we have always been burnt by our so called brothers. It's about time we become more reallistic in our dealings and keep our self-interest more in right perspective---treat and be more apprecaitive of those countries who are there when we need them irrespective of any claims of, fake, kinship. If you ask me, Pakistan must change its priorities and be more prudent in dealing with the Saudis or Kuwaities etc. they are much too cunning and selfish in their attitudes----they need slaves and not brothers and we must refuse to fulfil their such fantasies. We should recognize Israel and cultivate better and more friendly realtions with all those who prove friends by their deeds in our hour of need.
@Falcon:
May be in the year 3112!
You know why our brothers in faith won't do us favors anymore ? Because our common boss is upset with Pakistan.
very good !!!!
it's time we differentiate between being a brother and being a fakeer !!!!
@Sikander: Well science proves it otherwise. Mongols have totally different set of characteristics and so do the Greeks. They are genetically very different. Ask any doctor in Pakistan about transfusing blood from a Greek/Mongolian donor to some Pakistani in need of blood and the doctor will tell you that Greek/Mongolian blood wouldn't be easily compatible with Pakistani who is in need of blood.
By the way learn to spell descendants correctly....
@Lala Jie: lol....we trade with America and they are not a Muslim country. Stop coming up with lame arguments. India is our enemy.
Great news. Now government might started thinking about alternate ways of power generation. I hope!
@Sajid Ali: I think it's because it's at a subsidized rate. The govt is bearing the brunt of oil price hikes internationally.
Maybe, the Saudis will trade oil for Pakistani nukes?
@CaptainCookesPeerSahib: Its not healthy to live with so many illusions!!! Beggars will always remain beggars, because that is the only trade they know!!
dont worry Indians. The saudis will soon come begging to us, when the iranians have developed nukes.
Indians should worry less about pakistan, and more on why 650 million people in THEIR country are without toilets. And also where trillions of rupees in corruption Money went. Its easy to get a cheap thrill and kick out of pakistans problems, but the fact is, We have started a revolution which will change the face of our country...Whats up with anna hazare?
@ABC , IS IT A SERIOUS OR SARCASTIC REMARK ? Cleat the quary plz.......
The nation should learn to live within its means ,sooner the better. Demonstrations ,Dharanas ,Juloos etc are also not going to solve the issues we are facing. Its good that we see the reality and work accordingly.
@Hu Jintao: stop all relations with them also and warn them by showing our latest nuclear weapons and missiles
Please stop acting so stupid and Gung Ho !!! So you think that everytime Pakistan does not get what it wants, they can simply go around threatening other Nations with their Nukes??? Shows the depth of your knowledge and understanding about international affairs, trade and relations. Do you think that the Global community will sit around, in event of such threats from Pakistan??? Don't tempt faith and also don't give opportunity as these Nukes will be taken out faster than you can think possible by the rest of the world!!!
The cause is the bad relations with USA........
stop all relations with them also and warn them by showing our latest nuclear weapons and missiles
@Sikander Please read Arab Origins by Mr.Salman Rashid in opinion section.:
The pressure is being built by these countries on Government of Pakistan to let Musharraf land in Pakistan and set him free to enter into politics.
@Sajid Ali: I cant understand why PSO cant pay the money? I mean we pay every paisa to petrol station while we fill our cars tank then why PSO is unable to pay its debts?
The reason PSO is in trouble is due to the fact that it has too many Departments of Govt and Industry, which simply do not pay any bills for their Fuel consumption. I won't even mention the Army as no doubt they too have never paid for Fuel costs !!!
@Stupid man - Pakistanis are neither Arab or Indian descents. Genetically we Pakistanis are 'Mongols' and 'Alexander the Great' descendents. Your name exactly descibes you!
@Pakhtun: For how long China will help Pakistan? China only hepls its own interest.
Well Pakistan claims that they are descendants of Arabs but genetically their DNA is clearly different from the Arabs. Their genes are identical to India subcontinent. It is no wonder that the Arabs do not accept Pakistanis as brothers.
btw its a nice decision , PAK Gov. need to exploit the energy resources present in PAK, their lac of leadership only suggest them to ask for free,the Gov. of PAK is not the representative of PAK people .
shame on you ET
I cant understand why PSO cant pay the money? I mean we pay every paisa to petrol station while we fill our cars tank then why PSO is unable to pay its debts?
Kuwait and Saudi Arabia will be more than generous to fund our Madrassas:-)
@Amarr:
How can you talk of trust? That's a word Pakistan doesn't understand and the whole world knows it.
Hafiz saeed must be in shock. If he isn't ....he should be.
So where is Roftcopter and Ali Tanoli ? Checking on current status of ummah ? World is beyond religion and more on fwd thinking and co-operation. It will be more humiliating to accept India's friendship after all of world has shut door to Pakistan. In fact it already has if Pakistanis have not realized. World needs money not the so called strategic assets to survive.
This just keeps getting worse. Govt becoming more and more unpopular partly due to un due stress from the establishment & SC.
Unfortunately for us the Arabs are right in their business dealings, at this time we can't afford to be on the wrong side of US & it's $upport.
A dim situation, worrisome!
The word "Bhikari" comes to mind.
@Amarr - Kuwait and Saudi Arabia have proved to you who are unworthy. India does not have this kind of 'rejects'.
Reality hurts and hurts badly.
Get over this brotherly thing. It's pure business. Pakistan should make efforts to innovate technology towards green energy. Yes innovate. If we can make the big bomb than our scientist can also work in line making green energy.
Have you approached your brother - China ?
face the facts - will our leaders come out of sweet dream?
This has nothing to do with bubble of ummah or muslim brotherhood..... We can not blame others for our inefficiency.. why would someone else pay for our corruption, leakages and pilferages,,, If we are running a vicious circular debt, why would Saudi or Kuwait bear the consequences of our mismanagement and misgovernance... when it comes to natural calamities and disasters, Muslim countries always step up to hep us.
@Lala Jie - Pakistan is wary of untrustworthy business partners and it has been stung too may times by India and that is why it feel doing business with India is a risky proposition. Unfortunately, with the same token, some Arab nations have exploited Pakistan.
Pakistan should focus on what is best for itself to become a developed country: Good relations with Israel, America, China, Europe, Japan, and India. The rest of the world is useless, and as we can now see, there are no "friends" or "brothers" in international diplomacy. Just "trade partners." Regards, Rehan
I bet the Saudi representative had a hard time keeping a straight face when he heard that proposal -- but then again maybe he just broke out laughing.
@Lala Jie: It not we dont trade with india because they are non-muslim. how do you neglect the serious disputes between us and them?
I agree with Arab countries. Pakistani govt can't simply use "brotherly" card to blackmail them. It's a simple matter of purchasing power. Even real relatives refuse loans. Thanks to Arab countries for showing Pakistan its true value.
Pakistan has to learn to stand on it's feet.This will not happen till FBR becomes an efficient,corruption free organisation and tax to GDP ratio increases in Pakistan to atleast 13 %.All this is doable if FBR shapes up and introduces good governance.
Its for our own good, this govt. wants to use its asset on personal usage & credit will have to be paid by the next govt. Saudi's are our brothers & they will be in future..
I do not blame these "brotherly states". After all they are not responsible for the corruption that is rampant in our country.
Damn! The situation is worse than what i expected.
Awww!! Shouldn't consider them brothers then. Had it been Iran or China, there wouldn't have been any NO!!
Its good that we realized that we should not rely on any one and stand up on our own feet.
Well, if my brother constantly asked me to loan him money every month, after a certain point in time, I would also probably tell him to limit his extra expenses rather than asking me for handouts every month.
Ask China also, your all weather friend.
Will we ever by self-sufficient???
'It's economy stupid', every country acts on its own interests and welfare of its people.
Good thing for Pakistan. This will force Pakistan to proudly stand on its own two self sufficient feet. All this external help that is ruining the country.
So the bubble of "Ummah" has popped. Still we believe we should not trade with India because it is a non-Muslim country. The Saudies and the Kuwaitis are making business deals, and we are out to destroy ourselves for the sake of so called "Ummah"...
what happened to the muslim love between the two brotherly countries? our fellow muslim brothers are not willing to help us out.then why do we accord such special treatment to them? why do their proxies in pakistan go into fits of rage whenever they are rightly criticised?