Pakistan has formally requested a $1 billion oil facility from Saudi Arabia on a deferred payment basis for the year 2024. This financial aid is essential for Pakistan, which is facing economic challenges. While Saudi Arabia has not yet given its approval, discussions on terms and conditions are expected to take place soon.
Notably, this oil facility is part of the International Monetary Fund’s (IMF) $3 billion Standby Arrangement program to support Pakistan’s oil sector until March 2024. The current facility, which ends in December 2023, has already disbursed $700 million to Pakistan, with an additional $300 million expected by the end of the year.
This financial arrangement originated in November 2021 when a $1.2 billion financing agreement for importing petroleum products was signed between the Saudi Fund for Development and Pakistan’s Economic Affairs Division.
In 2024, Pakistan hopes to secure this $1 billion facility to help stabilize its oil economy and address financial constraints. The outcome of Saudi Arabia’s decision and the terms of the facility will be pivotal for Pakistan’s economic well-being in the coming year.