Pakistan seeks financial aid and oil facilities from Saudi Arabia

REUTERS/Faisal Mahmood

Pakistan is seeking financial help from Saudi Arabia that will include doubling the current deferred oil payment facility given by Riyadh to $2.4 billion per year, finance minister Ishaq Dar said on Tuesday.

Pakistan is struggling to meet its external financing obligations in the face of low foreign exchange reserves that barely covered a month of imports, and is also beset by decades-high inflation that has slowed down its economy.

“I have discussed both things (financial help and oil facilities) with the Saudi finance minister, and there are positive vibes from there. They said they will support us,” Dar said during an interview with local television channel Samaa.

He said the government was in touch with Saudi authorities, but did not give a time frame for the aid. Reuters earlier reported that Pakistan expects the assistance this month.

Dar also said that Islamabad was looking at purchasing discounted oil from Russia, and that he had discussed the matter with officials from the US State Department back in October.

Dar said US officials had told him that a G7 pricing committee was being set up for Russian oil products and that there would be a price cap.

“(They said) you shouldn’t buy (oil) for above that, and I agreed,” he said.

Pakistan has historically imported most of its oil and gas products from the Middle East. But, with energy making up a majority of its imports, it is seeking discounted oil to lower its current account deficit.

Pakistan’s petroleum minister travelled to Moscow last month and said that Russia had agreed to sell Pakistan petroleum products at a discounted price.