The official delegation is back on Thursday from Saudi Arabia after getting a categorical assurance that Riyadh will provide support to Pakistan partially in the form of oil facility against deferred payments and some cash for plugging the current account deficit.
Sources said Saudi authorities agreed during the talks with Pak official delegation, led by Petroleum and Foreign Minister Shah Mahmood Qureshi, that Riyadh will provide Pakistan support partially as oil facility against deferred payments and some in cash form for three years.
The official delegation had flown to Saudi Arabia on August 26 for negotiating a deal with Saudi authorities for the oil facility. It comprised National Reconstruction Bureau (NRB) Chairman Dr Asim, Finance Secretary Furrukh Qayyum, Petroleum Acting Secretary G.A. Sabri, and Additional Finance Secretary Asif Bajwa.
Pakistan had demanded of Saudi Arabia the supply of 110.000 barrel of crude oil per day for three years. Its total volume in monetary terms was estimated between $5 to $6 billion. Pakistan is likely to get oil from Saudi Arabia against deferred payments from next week. However, the two sides are yet to finalise modalities for an amount that Pakistan will get as cash from Saudi Arabia for offsetting economic woes.
In the recent past, Saudi Arabia had provided Pakistan $300 million for budgetary support. This was followed by an announcement by Chinese government for providing Pakistan a $500 million loan at soft-terms and conditions during former president Pervez Musharraf's visit to China a couple of months back.
The country is facing severe financial crisis and after poor performance of the key sectors of economy, the government is looking towards friendly countries for financial support. Much depends on the support of Saudi government. The oil supply against deferred payments could serve Pakistan's purpose of easing pressure on its economy. The officials of the delegation termed their visit to Saudi Arabia and meetings with Saudi authorities extremely positive which would bring good news for Pakistan shortly. They are hopeful of getting oil from Saudi Arabia under the agreed arrangement from next week that will help Pakistan stop quick erosion of its forex reserves.
Pakistan's forex reserves are depleting quickly. And oil import bill is one of the major factors, which are bringing forex reserves down to an alarming level.
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