Pakistan signs deferred payment oil import agreement with Saudi Arabia worth $1.2 billion

Pakistan has signed an agreement with the Saudi Fund for Development (SFD) to import Saudi oil on deferred payment for one year, totaling $1.2 billion, according to a statement from the Prime Minister’s Office (PMO) on Monday.

A delegation led by SFD CEO Sultan Bin Abdul Rehman Al Marshad met with Prime Minister Shehbaz Sharif in Islamabad.

PM Shehbaz witnessed the signing of the Oil Import Financing Facility and a loan agreement for the Gravity Flow Water Supply Scheme in Mansehra, Khyber Pakhtunkhwa, the PMO said.

Secretary Economic Affairs Division Dr. Kazim Niaz and SFD CEO Sultan Bin Abdul Rehman Al Marshad signed the agreements on behalf of their respective governments.

“The prime minister welcomed the signing of the Oil Import Financing Facility, under which Pakistan will receive oil on deferred payment for one year, totaling $1.2 billion,” the PMO statement read.

The deal is expected to bolster Pakistan’s economic resilience by ensuring a stable supply of petroleum products while easing immediate fiscal pressures.

Additionally, the SFD will provide $41 million for the Gravity Flow Water Supply Scheme in Mansehra, Khyber Pakhtunkhwa, which will enhance access to clean drinking water for 150,000 local residents, improving public health and quality of life, the PMO said.

PM Shehbaz praised the SFD for financing projects in health, energy, infrastructure, and education in Pakistan. He also acknowledged the Fund’s efforts in aiding reconstruction in areas affected by the 2022 floods.

The SFD CEO updated PM Shehbaz on ongoing projects, including the Mohmand Multi-purpose Hydropower Project, Golan Gol Hydropower Project, Malakand Regional Development Project, and other initiatives funded through Saudi grants, the PMO stated.