Kuwait has extended its oil credit facility to Pakistan for an additional two years, marking a shift from the usual one-year extensions. The announcement was made by Kuwait’s Ambassador to Pakistan during a meeting with Petroleum Minister Ali Pervaiz Malik in Islamabad on Wednesday, as confirmed by a statement from the Petroleum Division.
Federal Minister Ali Pervaiz Malik welcomed H.E. Nassar Abdulrahman J. Almutairi, the Ambassador of Kuwait, at the Ministry of Petroleum in Islamabad. The extension of the facility signifies the first time Kuwait has agreed to a two-year credit term, providing Pakistan with a more stable and longer-term financial arrangement.
Minister Malik expressed gratitude for Kuwait’s continued support and acknowledged the special accommodations made for Pakistan in the credit extension. He emphasized the importance of the facility in addressing Pakistan’s energy needs.
The Kuwaiti ambassador expressed optimism about Pakistan’s economic prospects, reiterating Kuwait’s commitment to deepening its economic and energy partnerships with Pakistan. The discussions between the two sides centered on strengthening bilateral cooperation in the energy sector and exploring fresh investment opportunities in Pakistan’s petroleum industry.
The extension of the credit facility comes as Pakistan’s economy has stabilized, avoiding a potential default, thanks to a $7 billion International Monetary Fund bailout. However, the country continues to face challenges due to energy imports, which remain a significant drain on its foreign exchange reserves. As a result, the government has relied on credit facilities and rollovers to maintain its reserve levels.
In addition to the Kuwaiti credit extension, Pakistan’s energy imports are also supported by other regional partners. In February, Saudi Arabia, through the Saudi Fund for Development (SFD), extended a $1.2 billion financing facility to import oil derivatives for one year. Since 2019, the SFD has provided a total of approximately $6.7 billion to Pakistan for oil derivatives.
