ISLAMABAD, Feb 1: Pakistan expects to get around $2 billion worth of crude oil per annum from Saudi Arabia under the Special Financing Arrangement (SFA) during the ongoing visit of Saudi King Abdullah bin Abdul Aziz, it is learnt.
A finance ministry official told Dawn on Wednesday that during his December visit to Saudi Arabia President Gen Pervez Musharraf had formally requested King Abdullah to restore SFA to absorb Pakistan’s ever-rising oil import bill.
“We are very hopeful of an agreement (on SFA) during the visit of King Abdullah,” the official said. The issue was initially discussed about two months back.
According to the source, Pakistan imports about 110,000 barrels of crude oil per day from Saudi Arabia that translates into about $2 billion per annum. Pakistan wants this import under the SFA to reduce mounting pressure on foreign exchange reserves.
Pakistan’s trade deficit has widened by more than 132 per cent to $5.6 billion during the first six months of the current fiscal year compared with $2.4 billion of the same period last year.
The country’s oil import bill has also gone up by more than 62 per cent to $3.033 billion in the first six months of the year compared with $1.87 billion of last year. Crude oil import has also increased by more than 75 per cent to $1.9 billion in this period against $1.06 billion in the same period last year. The increase in the oil import bill has taken place despite 13 per cent quantitative decline in petroleum products.
The official said that the country’s total crude oil requirement was about 240,000 barrels per day. Of this, around 177,000 barrels were imported and the rest is produced locally. Pakistan also imports around 45,000 barrels per day from Dubai, 15,000 barrels from Qatar and 6,000 barrels from Iran.
Saudi Arabia started supplying oil to Pakistan at the rate of about $1 billion per year under SFA, commonly known as Saudi Oil Facility, in 1998 following the US-led international sanctions.
