Pakistan has approached Saudi Arabia for a $6.7 billion oil financing facility spanning 15 years to ease immediate external financing requirements and reduce pressure on its foreign exchange reserves.
Finance Minister Muhammad Aurangzeb raised the possibility of reviving the country’s deferred oil payment arrangement during a meeting with Saudi Fund for Development chief Sultan Abdulrahman Al-Marshad.
According to people familiar with the discussions, Saudi Arabia is examining Pakistan’s proposal. However, no final decision on the requested long-term financing facility has been announced.
Under the existing arrangement, Saudi Arabia has provided Pakistan with a $1.2 billion annual facility that allows the country to defer payments for oil imports for one year. The mechanism has been in place since 2019 and has helped Pakistan manage its immediate foreign exchange requirements.
The latest facility expired in April, prompting Islamabad to seek its revival amid continuing pressure on external financing and foreign currency reserves.
A renewed arrangement could help Pakistan manage oil import payments without requiring immediate dollar outflows, providing temporary relief to its balance of payments position. It would also support the country’s efforts to maintain financial stability while meeting energy import needs.
The proposed 15-year facility represents a request for longer-term financing support, although its final structure and terms would depend on negotiations with Saudi authorities.
Saudi Arabia has remained an important financial and economic partner for Pakistan. The outcome of the latest discussions could have implications for Islamabad’s short-term external financing position and its broader efforts to strengthen economic stability.
