Saudi Arabia agrees to provide oil on soft terms

The Saudi government has finally agreed to provide Pakistan crude oil worth $4.82 billion on soft terms, it has been learnt. According to highly placed sources in the Ministry of Petroleum, PPP co-chairman Asif Ali Zardari, who is scheduled to return from Saudi Arabia on Wednesday morning, has successfully managed to obtain for the country a highly crucial Saudi oil facility of 110,000 barrels a day on two years credit.

"Mr Zardari has been able to restore special oil facility known as SOF that Pakistan had enjoyed from the days of last Nawaz Sharif-led government till the three first years of this decade," sources told Business Recorder, requesting anonymity.

Besides, various Saudi companies have agreed to invest billions of dollars in Pakistan's infrastructure provided the government effectively works towards restoring political stability and improving law and order.

Sources said that Saudi Arabia had been providing 80,000 barrels per day on deferred payment or special oil facility (SOF) soon after imposition of sanctions on the country following a nuclear test by Pakistan in 1998.

It was in 2003 that then prime minister Mir Zafarullah Jamali demanded of the Saudi government to either enhance existing oil facility or increase the number of Hajis from Pakistan by 50,000. Although, Saudi government allowed Pakistan an increase in the number of Hajis, it withdrew special oil facility (SOF) to Pakistan.

At present, the sources said, Saudi Arabia and UAE have been providing Pakistan crude oil on deferred payments for 30 days. According to experts, Pakistan has to import 82 percent of its yearly consumption. The country imports around 250,000 barrels per day from Saudi Arabia, 150,000 from Abu Dhabi, 18,000 from Qatar and 15,000 from Iran.

Experts told Business Recorder that the refining capacity of Pakistan is limited and the country has to import its requirements of diesel, kerosene and furnace oil from different sources in the Middle East. Sources said Mr Zardari, who has held talks with all top Saudi leaders, including King Abdullah and Prince Faisal, is expected to hold a press conference on Wednesday to give media details of his successful visit to Saudi Arabia.