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Saudi Arabia to pay Pakistan $3.6bn for oil purchases

Saudi Arabia would pay $3.6 billion to the government of Pakistan on monthly basis over a period of two years. The government of Pakistan would receive $150 million per month that would be utilized only for the oil purchase.

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Minister for Finance and Revenue Shaukat Tarin Friday said that Saudi Arabia had agreed to provide US$3.6 billion for the purchase of crude oil.

Saudi Arabia would pay $3.6 billion to the government of Pakistan on monthly basis over a period of two years, Shaukat Tarin said while talking to media in Jhelum.

He said the government of Pakistan would receive $150 million per month that would be utilized only for the oil purchase.

Read more: Gov.t again postpones decision on payments to IPP, LNG subsidy

Tarin defends government

The PTI government has yet again increased petroleum products prices in the country. In addition to the increase in the price of petrol and high-speed diesel, the prices of kerosene oil and light-diesel oil (LDO) have also gone up by PKR.7.05 and PKR.8.82 per liter.

This latest increase in prices of petroleum products comes against a backdrop of booming oil prices in the international market. The finance minister further added that the petroleum levy had also been reduced to two to three rupees per liter from thirty rupees per liter in 2018. Two weeks earlier, the federal government had increased the prices of petrol and diesel by almost five rupees per liter.

Tarin ensured that the incumbent government had passed on the minimum increase in cost to consumers. β€œThe government absorbed the pressure of hike in prices in the international market by bearing the burden of two billion rupees,” informed Tarin. The finance minister insinuated that Pakistan is not immune to the volatility in the global oil market.

Read more: Oil rises on demand outlook, Gulf outages

The Oil and Gas Regulatory Authority (OGRA) had analyzed and advised the government on increasing petroleum prices, based on an increase in prices in the international market along with exchange rate fluctuations in the past two weeks. The press release by the Finance Division stated that the Prime Minister had passed on the least amount of increase in oil prices to the populace – against the recommendation of OGRA.

APP with additional input by GVS News Desk

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