$40 a barrel: Riyadh may offer oil at reduced rate

Officials says ease in prices will be used to reduce load-shedding and restructure power sector

ISLAMABAD: Saudi Arabia has signalled its willingness to supply oil to Pakistan at the subsidised rate of $40 per barrel, a close aide to Prime Minister Nawaz Sharif told The Express Tribune on Sunday.

The facility can be utilised to reduce load-shedding in the short-term and provide an opportunity in the medium-term to restructure the power sector by eliminating circular debt, ensuring recovery from the public sector and reducing system losses to bring it to a self-sustainable level.



The official claimed that the Saudi rulers were in close contact with the Nawaz government, particularly in reference to minimising the country’s energy woes. According to the official, the Saudis have been showing extraordinary interest in helping out the government.

In 1998 when Nawaz Sharif was in his second stint as prime minister, Riyadh granted Islamabad a ‘free oil facility’ to stave off the impact of economic US and EU sanctions following the nuclear tests.

Earlier, the Saudi government had not taken any interest in the issue because of its uneasy relationship with the PPP-led government, the official added.

Pakistan’s total crude oil import reportedly stands at about 400,000 barrels per day and 30,000 tonnes of furnace oil. Its total oil import bill stands at about $15 billion per annum.

In one of his research papers, Quaid-e-Azam University’s professor Dr Ishtiaq Ahmad wrote that the two countries have always enjoyed an incomparable level of understanding and friendship based on common religion, culture and social values. Saudi Arabia has always extended total and unqualified support to Pakistan through all its phases of tension and difficulties.

“Well over 1 million expatriate Pakistanis are living and working in Saudi Arabia, and they are an important source of foreign remittances for the country,” he said.

Published in The Express Tribune, January 12^th, 2015.