Pakistan will import around 32.7 million barrels of crude oil this year under the $1.2 billion Saudi facility that allows Islamabad to defer payments for oil imports.
Pakistan is currently facing a wide range of economic challenges, including high inflation, sliding forex reserves, a widening current account deficit and a depreciating currency.
Pakistan and Saudi Arabia signed a $4.2 billion Saudi support package, which included the $1.2 billion oil loan facility, during Prime Minister Imran Khan’s visit to Riyadh in October last year.
The financing agreement for the oil facility was signed last November between the Saudi Fund for Development (SFD) and the Pakistani Economic Affairs Division. In December, Pakistan received the $3 billion loan but the oil facility had yet to be put to use.
The Pak-Arab Refinery Company Limited and National Refinery Limited are planning to import 16.89 and 15.81 million barrels of oil in the year 2022 respectively. As per the agreement, the crude oil worth 100 million dollars per month for one year could be imported on deferred payment.
Pakistan and Saudi Arabia enjoy deep-rooted religious, fraternal and strategic relations. There are over two million Pakistanis living in the Kingdom, who are the biggest source of foreign remittances to Pakistan.
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Pakistan will import around 32.7 million barrels of crude oil this year under the $1.2 billion Saudi facility that allows Islamabad to defer payments for oil imports.