ISLAMABAD: Pakistan has formally requested Saudi Arabia to extend its deferred oil payment facility worth $1.2 billion, aiming to ease pressure on the country’s balance of payments. Officials confirmed that the request seeks to postpone payments for an additional year.
Petroleum imports from Saudi Arabia make up a significant portion of Pakistan’s import bill. The deferred payment facility is considered vital for boosting foreign exchange reserves and reducing external payment stress. The current agreement is set to expire in March 2026.
Pakistan’s economic team is in ongoing discussions with Saudi Arabia’s authorities to finalize the extension. If approved, the facility could continue until February 2027, providing Pakistan with critical financial breathing space.
This request comes amid broader economic measures. A day earlier, the United Arab Emirates (UAE) extended a $2 billion loan rollover for Pakistan by one month. Islamabad has also asked the UAE to extend another $1 billion tranche due in July, with the goal of securing a total of $3 billion in loans for a longer period.
Under the IMF’s current programme, Pakistan is required to ensure the rollover of $12 billion in external loans during this financial year. Officials said the extension from Saudi Arabia and the UAE is crucial to meeting these obligations while stabilizing Pakistan’s economic situation.
Analysts said the deferred oil payments from Saudi Arabia are particularly important as they allow Pakistan to manage import costs without immediate foreign currency outflows. This move is expected to support the government’s strategy to stabilize reserves and maintain essential imports.
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The discussions with Saudi Arabia highlight the ongoing strategic and financial cooperation between the two countries, which has been a cornerstone of Pakistan’s energy security for decades.
