Good news for Pakistan: Saudi to extend $15 bn bailout package to Pakistan

Pakistan’s key ally Saudi Arabia is expected to extend $ 15-billion bailout package to Pakistan’s highly indebted energy sector to help the nation overcome power crisis.

Saudi king being accompanied by top officials: File Pic

Saudi king being accompanied by top officials: File Pic

Pakistan’s key ally Saudi Arabia is expected to extend $ 15-billion bailout package to Pakistan’s highly indebted energy sector to help the nation overcome power crisis.

Islamabad, May 23/Nationalturk – In what could signal return of good days for Pakistan, country’s key ally Saudi Arabia is expected to extend $ 15-billion bailout package to Pakistan’s highly indebted energy sector to help the nation overcome power crisis.

“The Saudis are taking reasonable interest in helping out the incoming PML-N government led by Nawaz Sharif to overcome power crisis. The country is planning to extend bail-out package for Pakistan’s highly indebted energy sector by supplying crude and furnace oil on deferred payment to enable it to resolve the chronic circular debt issue,” a senior government official was quoted as saying by Pakistan’s newspaper, The Dawn.

Saudi envoy sought details of oil requirements

He said after Nawaz Sharif’s PML-N emerged as the single largest party in May 11 general elections, the Saudi envoy in Islamabad sought a briefing on the country’s oil requirements from the foreign ministry before calling on prime minister-designate Nawaz Sharif in Raiwind, Lahore.

The official said the Saudi envoy was immediately provided a position paper.

“Pakistan expects about 100,000 barrels of crude oil and about 15,000 tons of furnace oil per day from Saudi Arabia on deferred payment for three years. The amount involved works out at about $12-15bn. The facility can be utilised to reduce load-shedding in the short term and provide an opportunity in the medium term to restructure the power sector by minimising subsidies, eliminating circular debt, ensuring recovery from the public sector and reducing system losses to bring it to a self-sustainable level,” he said.

Bail out package can help Nawaz govt to overcome energy crisis

The official said bailout package can help Pakistan’s new government to be headed by Nawaz Sharif to  resolve country’s electricity crisis and develop hydropower projects through a combination of public and private investments and bagasse-based power production by the sugar industry.

“The arrangement for oil supplies on deferred payments could be further discussed during Nawaz Sharif’s first visit to Saudi Arabia soon after assuming the office of prime minister early next month,” he said.

Pakistan’s total crude oil import is about 400,000 barrels per day and 30,000 tons of furnace oil. Its total oil import bill stands at about $15bn per annum.

“The breathing space provided by the likely Saudi package could also be used for renegotiating gas price with Iran for the Iran-Pakistan gas pipeline to bring it down to a sustainable level,” the official said.

Under the gas sales and purchase price agreement, any party may seek revision of the rates in view of the cost of alternative import options one year ahead of the first gas flows scheduled to take place in December 2014.

The newspaper quoting official as saying that Saudi rulers had not taken any interest in the issue earlier because of the chill in their relationship with the PPP government.

Saudi government had extended a similar special package to Pakistan soon after it conducted nuclear tests in 1998 and faced international economic sanctions.

Between 1998 and 2002, Pakistan received $3.5 billion (Rs190 billion at the exchange rate at that time) worth of oil from Saudi Arabia on deferred payment, a major part of which was converted into grant.

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Faiz Ahmad / NationalTurk Pakistan News

  1. god bless pakistan

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