Pakistan signs agreement to defer USD 1.2 billion payment for Saudi oil

ISLAMABAD: Pakistan government signed an agreement with the Saudi Fund for Development (SFD) to defer by one year a USD 1.2 billion payment on oil imports. Radio Pakistan reported that Pakistan and SDF on Monday signed two financing agreements worth over one billion dollar.
These agreements include “Deferred Payment for Oil Import from Saudi Arabia” worth USD 1.2 billion for one year and “Construction of Gravity Flow Water Supply Scheme” at Mansehra amounting to USD 41 million.
Secretary Economic Affairs Dr Kazim Niaz and Chief Executive Officer Saudi Fund for Development Sultan Abdulrahman Al-Marshad signed the agreements.
Among others, Prime Minister Shehbaz Sharif and Saudi Ambassador Nawaf bin Said Al-Malki witnessed the signing ceremony.
Prime Minister Shehbaz welcomed the signing of the oil import financing facility, the Prime Minister’s Office (PMO) said in a statement, adding that Pakistan will receive the oil on deferred payment for one year, it said.
“This project will strengthen Pakistan’s economic resilience by securing a stable supply of petroleum products while reducing immediate fiscal burdens,” the PMO said.
Petroleum products from Saudi Arabia make up a major chunk of Pakistan’s import bill.
The Saudi facility to defer the payment can help Islamabad boost its foreign reserves ahead of the first review of a USD 7 billion from the International Monetary Fund in March.
Pakistanis constitute one of the largest migrant communities in Saudi Arabia with an estimated 2.64 million working there as of 2023. While 97 per cent of them are blue-collar workers, there is a growing demand for skilled labour in the Kingdom as it seeks to modernise its economy under the Vision 2030 scheme.