The federal government on Monday signed an agreement with the Saudi Fund for Development (SFD) to defer by one year a $1.2 billion payment on oil imports.
State broadcaster PTV showed the signing ceremony between a delegation of the fund led by its CEO Sultan Bin Abdul Rehman Al Marshad and Prime Minister Shehbaz Sharif.
The premier welcomed the signing of the oil import financing facility, the Prime Minister’s Office (PMO) said in a statement. 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.
It said the fund would provide an amount of $41 million for a water supply scheme to help access clean drinking water for 150,000 people in Khyber Pakhtunkhwa.
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 $7bn bailout from the International Monetary Fund in March.
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