Saudi Arabia likely to resume oil supply on deferred payment

ISLAMABAD:

Saudi Arabia is likely to resume oil supply to Pakistan on deferred payment during the upcoming visit of Prime Minister Imran Khan to the kingdom, the energy ministry officials said on Tuesday.

In October 2018, Saudi Arabia had announced a $6 billion bailout package for Pakistan’s ailing economy, which included oil supply on deferred payment worth $3 billion while $3 billion in balance of payment support.

The two friendly countries had signed agreements on the sidelines of the second edition of the annual Future Investment Initiative (FII) Conference in Riyadh. Following the agreement, Saudi Arabia deposited $3 billion in the State Bank of Pakistan to ease pressure on foreign exchange.

Under the deferred payment facility, Saudi Arabia had committed to provide crude oil on one-year deferred payment which amounted to $3 billion. However, soon after the agreement, the two sides developed differences and Pakistan could not even use half of this facility.

Along with the oil on deferred payment facility, Saudi Arabia had offered to export liquefied natural gas (LNG) to Pakistan. But Pakistan did not agree to the proposal as Saudi Arabia did not have the product. Secondly, Pakistan was already importing LNG from Qatar.