ISLAMABAD, Feb 4: The Government of Pakistan has reached an agreement with the Saudi Fund for Development (SFD) to postpone a payment of USD 1.2 billion related to oil imports by one year.
According to Radio Pakistan, on Monday, Pakistan and SFD signed two significant financing agreements totaling over one billion dollars.
These include a “Deferred Payment for Oil Import from Saudi Arabia” for USD 1.2 billion for one year and a “Construction of Gravity Flow Water Supply Scheme” in Mansehra, which is valued at USD 41 million.
The agreements were signed by Secretary for Economic Affairs Dr. Kazim Niaz and CEO of the Saudi Fund for Development, Sultan Abdulrahman Al-Marshad.
The signing ceremony was attended by Prime Minister Shehbaz Sharif and Saudi Ambassador Nawaf bin Said Al-Malki, among others.
The Prime Minister expressed his satisfaction with the financing facility for oil imports, as stated by the Prime Minister’s Office (PMO), which added that Pakistan would be receiving oil based on deferred payment for a year.
“This initiative will enhance Pakistan’s economic resilience by ensuring a consistent supply of petroleum products while alleviating immediate fiscal pressures,” the PMO remarked.
Oil imports from Saudi Arabia constitute a significant part of Pakistan’s overall import expenses.
This arrangement to defer payment is also expected to assist Islamabad in strengthening its foreign reserves ahead of the upcoming review of a USD 7 billion package from the International Monetary Fund in March.
As of 2023, Pakistanis represent one of the largest expatriate communities in Saudi Arabia, with about 2.64 million working there. Although the vast majority are employed in blue-collar jobs, there is a rising demand for skilled labor as Saudi Arabia aims to modernize its economy through the Vision 2030 initiative. (PTI)
