Pakistan to ask Kuwait for extension of oil credit facility

Pakistan will ask Kuwait for the extension in two months credit facility for oil supply for one year and narrowing of the trade imbalance in favour of Pakistan in the upcoming Joint Ministerial Commission meeting, it is reliably learnt here on Tuesday.
Official sources told Business Recorder that the government of Pakistan would raise the issue of trade imbalance between Pakistan and Kuwait in the meeting of the JMC of both the countries, which is likely to be held by the end of February.
Sources said that in 2003, Kuwait agreed to supply furnace oil on 60-day deferred payment basis, as their existing 90-day credit arrangement expired on December 31, 2002.
The payment period was extended to 90-day on the request of former petroleum minister Usman Aminuddin for over two years.
The agreement on 90-day payment basis expired and was rescheduled on 60-day basis from January 1 to December 31, 2003, the source said.
The agreement of the 60 days credit facility is most likely to be renewed during the upcoming joint ministerial meeting, source added.
Sources said that an inter-ministerial meeting in this regard was held last month, where it has been decided that the issue of trade imbalance between the two countries would be raised during the upcoming meeting adding that government will strive to increase the export of rice and vegetables to Kuwait.
Pakistan has secured around 50 percent of its total $3.5 billion oil imports on deferred payments from Saudi Arabia and Kuwait during the last year.
Sources said that total oil imports on deferred payments from the two Islamic oil producers reached about $1.8 billion mark during 2003.
Saudi Arabia provided $2 billion oil to Pakistan on deferred payments in 1998 and 1999 on the special request of the then Prime Minister Nawaz Sharif following sanctions imposed against Islamabad by the world community after the nuclear tests.
A major portion of this amount was later converted into a grant and the facility was extended time and again and continued till last year.
The sources said that with the increased rice and vegetable export the trade gap between the two countries will bridge it to some extent as the balance is tilted toward Kuwait at present.