ISLAMABAD, Dec 30: Pakistan is seeking around a billion-dollar grant from Saudi Arabia in the form of oil supplies on deferred payment until June 2004, a senior government official told Dawn.

Prime minister Mir Zafarullah Khan Jamali on his proposed visit to Saudi Arab would also request the Kingdom to make special arrangements for uninterrupted oil supplies in case of a possible US war on Iraq besides extending the deferred payment facility until the next fiscal (2003-04), the official said.

Director-General Oil of the Petroleum Ministry Sabir Hussain will assist him in talks with the Saudi authorities, official sources said.

This is the prime minister’s second trip abroad since he took over last month. He signed Turkmenistan-Afghanistan-Pakistan gas pipeline agreement in Ashkabad last week on his first foreign visit.

Pakistan’s total oil imports are expected to cross $3.5 billion by end of the current fiscal year and could go up further in case the prevailing international price-trend continued, said the source.

The official said that international oil prices at $30 a barrel were now at the two-year highest although there were no clear signs of war which meant that oil could go beyond $35 a barrel in case of a war.

Pakistan wants to curtail the oil import bill and ensure such arrangements that it could easily absorb foreign exchange shocks.

“Secure, continued, and uninterrupted supply is the main concern for Pakistan where it should be worried about in the first place in case of uncertainties in the Middle East while special pricing or grant is the secondary issue,” said an official who has been closely monitoring the oil supplies position.

Pakistan’s major suppliers, notwithstanding the petroleum sector deregulation, are Saudi Arabia and Kuwait through Bakri and Kuwait Petroleum Company (KPC) which together provide around 90 per cent of total oil imports.