Saudi Arabia asked to renew $3.2b oil facility

Pakistan has requested Saudi Arabia to renew the $3.2 billion deferred payment facility for oil supplies after a one-year agreement between the two countries for the arrangement expired in May this year.

“We have requested Saudi Arabia for an extension in the deferred payment facility but I can’t say when it will be renewed,” Special Adviser to the PM on Petroleum Division Nadeem Babar said at new conference on Wednesday.

He was accompanied by Federal Energy Minister Omar Ayub, Federal Science and Technology Minister Fawad Chaudhry, SAPM on Power Division Shahzad Qasim and Power Secretary Omer Rasul.

The ministers and SAPMs were briefing the media about the salient features of the Alternative Energy Policy, 2019.

Responding to a query, Babar said a false impression had been created that Saudi Arabia had refused to extend the facility.

“The renewal of the agreement is a normal process,” he added.

“In the first year, Pakistan didn’t utilise the entire $ 3.2 billion facility and now we have requested for its renewal for another year.”

Saudi Arabia had announced the $3.2 billion oil supplies per annum facility with the provision of renewal for two more years.

The agreement expired in May and has not been renewed yet.

Speaking at the news conference, Energy Minister Ayub said the Council of Common Interests (CCI) had recently approved the alternative energy policy which would help in making the country self-sufficient in power generation.

“We have the target to produce 20% of the country’s total electricity through renewable means by 2025,” he added. “It will then be taken to 30% by 2030 from the current 5%.”

The minister said by adding hydropower, coal and nuclear energy into the national grid by 2030, around 75% of the country’s total energy requirement would be met through indigenous resources.

Under the new policy, competitive bidding will be conducted that will bring down electricity rates.

“The solar energy projects that have been initiated during our tenure have brought down the rate by four cents per unit,” he added.

The minister said the availability of inexpensive electricity would benefit industrial and domestic consumers, besides creating more job opportunities.

The new policy also focuses on local manufacturing of solar panels, wind turbines, blades and other similar equipment.

SAPM Babar said the country would import the equipment required for the renewable energy generation but later it would be produced locally.

“So far three Chinese and one European company have expressed their interest in establishing their plants for the manufacturing of equipment for renewable energy in Pakistan,” he added.

The science and technology minister said there was an import mafia making local production expensive and imported equipment cheaper by charging zero tax on furnished imported good and heavy tax on raw material.

In the renewable energy policy the duties and tax structure has been revised and now there is zero tax on equipment for renewable energy. This will help in attracting Chinese companies to relocate to Pakistan.

The minister said Pakistan was importing all Covid-19 related supplies amid the pandemic.

“Now within a few months, Pakistan has become a major exporter of the Covid-19 supplies,” he added.