Pakistan’s petroleum group imports including crude and Liquefied Natural Gas LNG stood at $13.26 billion during the last fiscal year FY18 while the country has imported $6.8 billion worth of petroleum product during the first 5 months of current fiscal year FY19.

ISLAMABAD: Adviser to Prime Minister on Finance Abdul Hafeez Sheikh on Wednesday said that from July 1, Kingdom of Saudi Arabia (KSA) is activating the deferred payment for petroleum products facility of $275 million per month amounting to $3.2 billion per year for 3 years.

In his tweet, the finance adviser thanked the Crown Prince of Saudi Arabia, His Highness Muhammad Bin Salman for his continuous support for the people of Pakistan.

Sheikh further wrote that activating the deferred payment for petroleum products facility by Saudi Arabia will strengthen Pakistan s Balance of Payments position.

The adviser said Saudi Arabia will supply oil worth $3.2 billion per year on deferred payments for three years. He said the Kingdom will supply $275 million oil to Pakistan on monthly basis from next month.

In October last year, Saudi Arabia had agreed to give Pakistan $3 billion in foreign currency support for a year and a further loan worth up to $3 billion in deferred payments for oil imports to help stave off a current account crisis.

The Saudi agreement came after Prime Minister Imran Khan attended a Saudi investment conference that has been boycotted by several other leaders over the death of a dissident Saudi writer at the country’s consulate in Istanbul.

According to the agreement, the Saudi Aramco will supply around 110,000 barrels per day crude oil to Pakistan’s state run Pak Arab Refinery and National Refinery for refining.

Pakistan’s petroleum group imports including crude and Liquefied Natural Gas LNG stood at $13.26 billion during the last fiscal year FY 18 while the country has imported $6.8 billion worth of petroleum product during the first 5 months of current fiscal year FY 19.

Khan had said before departing that his country is “desperate” to shore up its foreign currency reserves, which are at a four-year low, equivalent to less than two months’ imports and barely enough to make its debt repayments through the rest of the year.

Saudi Arabia had also confirmed its interest in the oil refinery project in Pakistan. Crown Prince Muhammad bin Salman agreed to the Prime Minister’s suggestion to reduce visa fee for Pakistani workers, which is a significant step towards enhancing the country’s workforce in Saudi Arabia, as well as facilitating travel of people from both the countries.

Far-reaching decisions on bilateral economic and financial cooperation were also reached, which included:

A memorandum of understanding (MoU) was signed between then finance minister Asad Umer and Saudi Finance Minister Muhammad Abdullah Al-Jadaan under which Saudi Arabia would place a deposit of USD three billion for a period of one year as balance of payment support. It was agreed that the Kingdom of Saudi Arabia would also provide a one-year deferred payment facility for import of oil, up to USD three billion and this arrangement would be in place for three years, which would be reviewed thereafter.

The earlier visit of the Saudi delegation had evaluated the possibility of investing in a petroleum refinery in Pakistan. Saudi Arabia confirmed its interest in this project, and an MoU will be signed after obtaining cabinet approval.

Saudi Arabia expressed interest in development of mineral resources in Pakistan. For this purpose, the Federal Government and the Government of Balochistan will consult, following which a delegation of the Kingdom will be invited to visit Pakistan.