By IANS
Islamabad : Pakistan is seeking to import oil from friendly Islamic countries on a deferred payment basis in the face of plummeting reserves and unpaid bills.
“A delegation would be visiting Saudi Arabia, the UAE (United Arab Emirates) and Kuwait in a couple of days to seek uninterrupted supplies on deferred payments and reduced rates,” Dawn newspaper reported Wednesday, quoting sources.
Recently, Pakistan’s oil reserves plummeted to their lowest level and diesel stocks at one stage were enough only for seven days. The oil marketing companies had attributed the fall in stocks to non-payment of price differential claims by the government that exceeded $40 billion last month.
The stocks, however, improved as a result of imports and, ironically, the closure of businesses and industries for almost 15 days in the wake of Eid holidays and mourning following the assassination of former prime minister Benazir Bhutto.
The government expects its oil import bill to reach $11 billion by the end of the current fiscal, almost 40 percent more than last year’s $7.9 billion. It has estimated an extra burden of about 100 billion Pakistani rupees ($1.6 billion) on the budget as a result of higher than anticipated international oil prices and for not passing on its impact to consumers.
“A senior government official confirmed that consultations among the ministries of petroleum and finance, Prime Minister’s Secretariat and the Presidency had been held over the past few days for seeking oil import from the friendly countries,” Dawn said.
“A source in the ministry of finance said the government was trying to revive the Special Saudi Oil Facility (SOF) under which Pakistan was provided oil initially free of cost after the 1998 nuclear tests. Later it was converted into a credit facility. The SOF in one year had stood at $960 million before being reduced to about $230 million in 2002-03 when it was discontinued,” the newspaper added.
“Sources in the petroleum ministry, however, ruled out any possibility of revival of SOF, saying only the option of oil supplies on deferred payments could be possible in the given circumstances. That would mean that oil would be provided by Saudi Arabia on deferred payment of 90 or 120 days, instead of normal 30 days,” Dawn said.
Pakistan’s total oil requirement is about 16-17 million tonnes a year. About 82 percent of this is met through imports and the rest through domestic production.
The country’s diesel consumption is around 8.5 million tonnes, followed by furnace oil that ranges between four and six million tonnes.