Sources in the Finance ministry revealed to Engineering Post that the deal regarding deferred oil facility with Saudi Arabia is in its advanced stages. The technicalities have been finalized and a revised draft of the agreement has been sent to Riyadh for approval. It is expected that the remaining ambiguities will be sorted out by the second week of January and the draft will be ready to be signed by ministers from both sides. Pakistan will receive up to $3 billion worth of oil with payment deferred for 365 days in the first year of the agreement in 2018. The Saudi Fund for Development will act as a third party in the agreement.
How the deal works
Pakistan based refineries will place orders with Saudi Aramco, government owned company for supplying crude oil. Pakistan has a long term contract with Aramco for supplying 110,000 barrels per day (bpd).
Of these, Pak Arab Refinery Ltd (Parco) has a quota of 60,000bpd while the remaining quota of 50,000bpd is allocated to National Refinery Limited (NRL).
Both Parco and NRL will place orders for import with Aramco and the The Saudi Development Fund will pay in dollars to Aramco.
However, these refineries will deposit an equivalent amount in Pak rupee with State Bank (SBP) here in Pakistan. The SBP will begin repayments to the Saudi Development Fund 12 months later, with monthly payments. For example, the January 2019 payment will be made in January 2020.This arrangement will be in place for a period of three years, with oil imports worth $9bn