Pakistan government seeks another Saudi Oil Facility for 2025

The Pakistan government is hoping to secure another Saudi Oil Facility for 2025, which would further support domestic currency.

Sources told Nukta that initial talks may take place during Prime Minister Shahbaz Sharif's visit to Saudi Arabia, with a delegation expected in December 2024 to finalize the deal. The facility is expected to provide $100 million per month, totaling $1.2 billion for 2025.

According to an analyst, friendly countries and international financial institutions have been approving loans following the IMF’s approval of $7 billion extended fund facility.

The steady flow of funds has improved the foreign exchange reserves, where State Bank of Pakistan (SBP) reserves reached $11 billion, the level last seen in April 2022.

The facility is smaller compared to the country’s yearly import costs. For the year ending June 30, 2024, Pakistan used $16.9 billion worth of petroleum products, slightly down from $17 billion the previous year.

In the first quarter of the current fiscal year, the petroleum import bill was $4 billion, up from $3.5 billion in the same period the previous year.

The Economic Affairs Division says the government plans to get $19.3 billion in financial assistance and loans from various sources.

This includes about $5 billion from Saudi Arabia and $4 billion from China. They also expect to borrow around $3.8 billion from commercial banks and raise nearly $1 billion by selling foreign bonds.