ISLAMABAD (Eshfak Mughal):- Saudi Arabia has provided crude oil to Pakistan worth of $100 million on defer payment basis to support for reducing the pressure on foreign exchange reserves which are squeezing due to growing current account deficit, sources said.According to the government sources, the brother country has started to provide crude oil to Pakistan under the defer payment basis. In this regard, the Saudi Arabia has provided crude oil worth of $100 million during March,2022 on defer payment.

Pakistan will import around 32.7 million barrels (MBL) of crude oil, during the year 2022, under an agreement signed with the Saudi Fund for Development (SFD) to meet its needs of petroleum products on deferred payment.

The Pak-Arab Refinery Company Limited (PARCO) and National Refinery Limited (NRL) will import 16.89 and 15.81 million barrels of oil in the year 2022 respectively.

As per the agreement, the crude oil worth $100 million per month for one year could be imported from Saudi Arabia on deferred payment.

The SFD programme is operative since March 7, 2022 and accordingly, the procurement of oil has commenced. The facility will be available for a 12 months period which may be extended for 1 year upon the consent of the parties.

Repayment of the original amounts plus the interest rate of 3.8 percent shall be made in one annual instalment in US dollar.

It is pertinent to mention here that Pakistan’s forex reserves have been decreasing. The forex reserves of the State Bank of Pakistan have been lesser than import bill of two months. According to the IMF definition, the country like Pakistan must have forex reserves equal to import bill of four months.

The Saudi facility is like a breath of fresh air for the Pakistan government which is currently struggling to build forex reserves of the SBP at sustainable level to control the currency valuation and to make foreign payments smoothly and timely.

It is pertinent to mention here that Pakistan’s forex reserves have been decreasing. The forex reserves of the State Bank of Pakistan have been decreased to lesser than import bill of two months. According to the IMF definition, the country like Pakistan must have forex reserves equal to import bill of four months.

The Saudi facility is like a breath of fresh air for the Pakistan government which is currently struggling to build forex reserves of the SBP at sustainable level to control the currency valuation and to make foreign payments smoothly and timely.

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