Saudi Arabia is resuming Pakistan's deferred oil facility

In principle, Saudi Arabia decided to re-establish Pakistan's deferred oil facility. The facilities are sold for an extended period of 3 billion dollars a year. The specifics of the procedures, a national daily published on Wednesday, are not yet final.

This was also reported to the media by Fawad Chaudhry, Federal Minister for Information and Broadcasting. The announcement comes after the recent visit of Premier Imran Khan to Saudi Arabia, which makes a new order that the Saudi Oil Facility is resumed (SOF).

This forms part of Pakistan's attempts to escape issues with foreign accounts and to pursue solutions to tariff rise and higher tax requirements from the International Monetary Fund (IMF). The resumption of this SOF will make a significant difference.

In the past, in July 2019 Saudi Arabia gave Pakistan a $6 billion financial package of $3 billion in deposits to Pakistan State Bank (SBP) and $3 billion in deferred payment oil facilities. This package was sold three years after Prince Mohammad Bin Salman visited Pakistan. The package has been offered.

In the beginning, it was decided that this facility would proceed for three years, with the option of reversal, but was then suspended. In fiscal 2019-20, Pakistan will use this facility only for around 30 percent (or $1.5 billion).

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