MM News

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

According to reports, Pak-Arab Refinery Company Limited (PARCO) and National Refinery Limited (NRL) are planning to 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 on deferred payment. The price will be as per existing long term agreements/contracts between Saudi Aramco, PARCO and NRL, it added.

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 Repayment of the withdrawn amounts plus the margin at the rate of 3.8% shall be made in one annual installment in US$.”

The government had reportedly given the Exploration and Production companies operating in Pakistan a target to produce around 29 MBL crude oil during the current fiscal year. The companies had produced 27 MBL of oil in 2020-21/

In February, then Finance Minister Shaukat Tarin informed the Senate that Pakistan will start utilising the Saudi oil facility on deferred payments from March.

The Financing Agreement worth $1.2 billion for import for petroleum products was signed on 29th November 2021 between the Saudi Fund for Development (SFD) and Economic Affairs Division (EAD), Pakistan.

As per the Financing Agreement, the SFD will extend the financing facility up to $100 million per month for one year for the purchase of petroleum products on a deferred payment basis.

Oil imports account for a major chunk of Pakistan’s import bill. During the first eight months of the fiscal year, Pakistan imported petroleum products worth $12.941 billion as compared to $6.446 billion in the same period last year, an increase of over 101%.