Pakistan imported petroleum products worth $100 million on a deferredpayment basis under the Saudi oil facility for the fifth consecutive monthin July 2022.
Official documents available with ProPakistani revealed that the governmenthas budgeted estimates of $800 million for oil imports under the Saudi oilfacility. However, Saudi Arabia has reportedly decided to double its oilfacility for Pakistan from $1.2 billion to $2.4 billion. It is expectedthat oil imports on deferred payment may increase in the coming months.
Saudi Arabia provided petroleum products worth $500 million to Pakistanfrom March to July. It also provided petroleum products worth $100 millioneach during March, April, May, and June 2022.
The Financing Agreement worth $1.2 billion for the import of petroleumproducts was signed on 29 November 2021 between the Saudi Fund forDevelopment (SFD) and Pakistan’s Economic Affairs Division (EAD). Underthis facility, the Pak-Arab Refinery Limited (PARCO) and the NationalRefinery Limited (NRL) will import petroleum products up to $100 millionper month from Saudi Arabia.
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The SFD has extended the financing facility for up to $100 million permonth for one year to facilitate the purchase of petroleum products on adeferred payment basis.
According to the official documents, the terms of the financing include theprice of purchase by the SFD and a margin of 3.80 percent per annum. Thefinancing agreement will initially be valid for one year, which may beextended for another year with mutual consent.link
