Pakistan will start getting oil supplies worth USD 9.9 billion from close ally Saudi Arabia from Monday on deferred payments for three years, the kingdom's embassy here said on Monday.
Cash-strapped Pakistan and oil-rich Saudi Arabia inked a financing agreement for the import of petroleum products, crude oil and liquefied natural gas (LNG) on February 17 during the visit of Saudi crown prince to Islamabad earlier this year.
"Pakistan will start receiving monthly oil supplies worth USD 275 million from Saudi Arabia with effect of July 1, 2019," the Saudi embassy said in a notification.
"These supplies will continue over the next three years, with a total value of USD 9.9 billion," The Express Tribune quoted the notification as saying.
Pakistan expects the generous Saudi facility to help ease pressure on the balance of payments.
"This package the keenness of the Saudi leadership to support the Pakistani economy for achieving financial stability and help the government to overcome the economic challenges and push the comprehensive development in Pakistan, and to emphasise the depth of relations between the two brotherly countries and peoples," the embassy statement said.
Pakistan is trying hard to avoid a balance of payments crisis, with the help of close allies like China, Saudi Arabia and the UAE. Islamabad is also negotiating a bailout package from the International Monetary Fund.
The oil facility had been announced in November and it was initially expected to become operational from January 1. However, due to various procedural and regulatory issues it took seven months to make the facility operational by July 1, which coincides with the start of new fiscal year, the report said.
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