-Says KSA to give $150m to Pakistan monthly
-Adds Riyadh will provide an Oil facility of $3.60b in 2 years
From Our
Correspondent
JHELUM: Federal Minister for Finance Shaukat Tarin said Friday Saudi Arabia has agreed to provide oil on deferred payment to Pakistan, a day after the government hiked the price of petroleum products up to Rs8.82.
The finance minister, addressing a ceremony, said Saudi Arabia would provide $150 million to Pakistan on a monthly basis, and in two years, Riyadh would provide a facility of $3.60 billion to Islamabad.
“This amount will be utilised to procure oil,” the finance minister said. Back in May, Federal Minister for Information Fawad Chaudhry had said Saudi Arabia had agreed, in principle, to revive the facility of oil supply to Pakistan on deferred payments.
The prime minister, on his visit to the kingdom earlier this year, had made a request to Saudi Arabia to resume the supply of oil to Pakistan on deferred payments for an extended period. “Yes, it’s almost done,” Chaudhry had said.
Earlier, Saudi Arabia had provided a $6 billion financial package, including $3 billion deposits into the State Bank of Pakistan, and the remaining $3 billion for oil facility on deferred payment on an annual basis.
The previous oil facility from KSA was signed for three years during the visit of Saudi Crown Prince Mohammad Bin Salman to Pakistan.
This facility was made operational from July 2019 with the understanding that the first-year bill would be paid on monthly basis and then second-year oil would be obtained on deferred payment.
So, this whole facility would end in the fourth year upon the maturity of getting oil for the third year. It was assessed at that time that Pakistan would require a $275 million oil facility on monthly basis from the KSA, so it accounted for $3.2 billion on a per annum basis for a three-year period.
Such facility was agreed upon for three years with the possibility of rollover of second and then the third year. Both sides had agreed that this facility would be provided through the IDB’s Islamic Trade Finance Facility (ITFC).
It is not known how much Pakistan had availed of the SOF in its first year, but then this facility got suspended.While defending the hike in petrol prices, Finance Minister Shaukat Tarin on Friday said the rates of petroleum products in Pakistan are still lower when compared to several regional countries.
Addressing a press conference in Islamabad alongside Minister of State for Information and Broadcasting Farrukh Habib, Tarin said the government is charging only Rs2-2.5 petroleum levy despite the fact that we had fixed Rs600 billion under this head. He said Pakistan ranks 17th in the region when it comes to petrol prices.
“Prices in the international market have increased recently forcing the government to hike local prices,” he said, a day after the petrol price was jacked up by Rs4 per litre and that of high speed diesel (HSD) by Rs2 per litre.
The minister blamed the previous government for the ills the country is facing today. “Pakistan became a food importer due to mismanagement during the last 30 years. We are currently importing wheat, sugar and pulses.”
Shaukat Tarin said Prime Minister Imran Khan stopped the ministry from increasing the levy as he wanted to lessen the burden on the masses. “This is the reason we want to give direct subsidy to the lower-income group.”
He said the PTI government is undertaking efforts to enhance agricultural output.
The minister further said that steps are being taken to control the prices of commodities. In six days, the minister assured that prices of ghee will come down to Rs 300 per kg.
Tarin lamented that when it comes to commodities, the middleman earns huge profits. He said that the administration is restoring the post of price magistrate to reduce inflation.
Crediting the steps taken by the government for tax collection, he said the FBR has achieved more revenue than the target it was given. “If the economy grows, its effects will be visible to the people.” Shaukat Tareen said the government is taking a big comprehensive plan to the IMF.
“I hope we will be heard in the IMF. We will have talks on revenue and the power sector.”
Noting that the revenue collection has increased up to 40%, he admitted that there are challenges in the power sector. “Increasing power tariff is not the solution,” he said.Meanwhile, PPP’s Senator Sherry Rehman has slammed the government for dropping a “petrol bomb” on the masses in times of extreme inflation.
She said that petrol prices now stand at Rs127.3/L while during the PPP’s govt in 2013, international oil prices remained high due to the global financial crisis, yet the price at home was nowhere close to the tsunami it is now.
“PTIMF is the opposite of what it promised: it does exactly what IMF says, borrows like no govt before and tells people the good days are here.”
