Saudis decline to resume oil financing facility



By Khaleeq Kiani

ISLAMABAD, Feb 8: Saudi Arabia has declined to resume $2 billion special financing arrangement (SFA) Pakistan had sought for crude oil imports to reduce surging trade deficit, it is learnt.

A senior government official privy to the recent meetings of Saudi King Abdullah bin Abdul Aziz with Pakistani leadership told Dawn that the Saudi King had not entertained Pakistan’s request for Saudi oil facility. “The issue did come up (for

discussion), but the chapter stands closed now,” said the official.

President Musharraf had initially requested King Abdullah during his visit in December last to Saudi Arabia to restore the SFA to Pakistan to absorb continuously rising oil import bill.

The official said Pakistan imported about 110,000 barrels of crude oil per day from Saudi Arabia that translated into about $2 billion per annum. Pakistan wanted this import under the SFA to reduce mounting pressure on foreign exchange reserves.

Pakistan’s trade deficit has already increased by over 132 per cent to $5.6 billion during first six months of the current fiscal year compared with $2.4 billion of the same period last year.

The country’s oil import bill has also increased by over 62 per cent to $3.033 billion in the first six months of the year compared with $1.87 billion of last year. Crude oil imports have also increased by more than 75 per cent to $1.9 billion in the first six months of the current year compared with $1.06 billion of the same period last year.

Such an increase in oil import bill has taken place despite 13 per cent quantitative decline in petroleum products and just 12 per cent increase in crude quantities.

The country’s total crude oil requirement is about 240,000 barrels per day. Of this, around 177,000 barrels of oil is imported and the rest about 63,000 barrels per day is produced locally. Pakistan also imports around 45,000 barrels per day from Dubai, 15,000 barrels from Qatar and 6,000 barrels from Iran.

Saudi Arabia had started supplying oil to Pakistan at the rate of about $1 billion per year under the special financing arrangement commonly known as Saudi Oil Facility (SOF) in 1998, following US-led international nuclear sanctions against Pakistan.

Initially, the SFA was for two years, but extended for another year and then gradually reduced and finally discontinued in 2003. Since oil import is the second largest contributor to Pakistan’s overall import bill, the government wanted relief in oil related foreign exchange loss.

Oil import of $3.033 billion in July-December was just behind machinery imports of $3.496 billion. The country’s total foreign exchange reserves of around $12.5 billion are much less to cover $13.65 billion worth of six month’s imports— a benchmark the government used to take pride in the recent years.

http://www.dawn.com/2006/02/09/top9.htm

Ehsan

thats good for Pakistan. otherwise Pak has to accept that poisonous idealogy that has kept it backward and look like begger. no wonder Musharraf is singing praise for Russia, Iran, and Israel. and i think this news item is intentionally leaked.

the fact of matter it that saudis are using poor muslims like cannon fodder agianst West to keep themselves in power.

Pakistan should slowly stop supporting SA defence forces.

stop being so damn ungrateful!

The oil facilitywas for the immediate period after the 1998 nuclear tests to lessen the impact of the AMERICAN sanctions!

they gave us money in our hour of need at least be grateful for that. In the aftermath of the earthquake the Saudis have committed $500 million. what more do you want!

this beggar mentality is pissing me off. Trade not aid.

Its not their fault,we cant be beggars.We shud be thankful for the past help and suck it up.The govt. says that its doing good,then why does it need favors.The 50% increase in oil prices over the last yr and the recent increase in the # of automobiles is the biggest reason for the deficit(damn,anyone can lease a car now).It wasnt a very green or smart move,but regardless its not KSAs fault.

India also faced the same sanction did it needed that OIL? and there OIL requirement is much more than us. If u think a little harder that OIL was reward for supporting taliban and it was understood as such.

and why Pak needs such money in hour of disasters? did India ask after Gujrat earthquake(which is far more economically important to India) or Tsunami or the recent earthquakes.

and who introduced this mentality? (think about charities and zakat). there is direct connection between pak dictators and Mullahs (and there foreign masters) of the past that has destroyed every other thing which would have keep pakistan standing on its own two legs like Skorea or Taiwan. there is no need for asking anything.

Well, we asked for it, they rejected. No qualms.

Anyways, I think its time the government does something about the trade deficit. We could easily control it by reigning on automobile imports.

what can u do? when people start thinking of zakat or aid as their right then this sht happens. people complain like hell.



lol. think a little harder kiddo taliban support was all for ourselves to support our control on afghanistan and not indian or iran controled alliance which came as a result of usa support to northern alliance.



hmmm. abhi abhi javan hoay ho kya. still hot blood in the veins :) . do u know indian budget. they could take care of all that just postponding one years of purchases for their air force. $1.6 billion was the final damage to government to take care of it all. do u cost of the contracts that they made in defence industry just after the tsunami.

do u know the estimated cost of operation in pakistan? 5.2 billion excluding indirect loses and thats just estimated final amount is still expected to rise.

its good to depend on your own arms but there is difference between depending on oneself and making unreasonable expectation of oneself.

dont go over public statements of politicians/generals. they will put every thing under national interests (but in reality they will be bidding for foreign powers) otherwise Nawaz sharif would not be Saudi guest and jehangir karmat would not be ambassador to US. there are plenty of things u dont even a have a clue.

un didnot get the point. IF Pak would have been rich like other countries there would not be any point of for $4 to $5b. here i am talking about hundreds of billions of dollars wealth. even Iran with all sanctions and 40000 dead in Bam didnot ask like this.

Please enlighten us with your clues.

please enlighten us all o wise one.



NO i get your point that is if you make it clear. go back to your post and read it to another person and ask him what he thinks about what have you written.

hmmmmmmmmmmm ok maybe they didnt.

but wait a second they did.

http://news.bbc.co.uk/1/hi/world/middle_east/3351329.stm

and they asked through the organisations too and accepted the aid from "the devil". atleast we are asking from a muslim country and did not ask india for the help. the choppers they offered with their pilots on their own. we did not ask them but iran did ask for the help from the " devil" .


But forget all that. an ask for aid in time of need is not an insult. but thiking of it as your "right" is diapointing.

oh about taliban,our politiciians, army and arab relationship. please enlighten us all with prove about all the great game in the back ground.

and while you at it tell us the big game behind the karamat being ambassidor and nawaz being out of country. cause i got a simpler explaination but i would love to see how you gonn pull out something out of the hat.

Both EU and US has now policy of not accepting any retired military person as ambassodor. why it was relaxed in case of Karamat? just think about it. and why would Saudis will dirty there image among islamist by liberating a corrupt from Jail?

It seems u cannot differentiate between Humanitarian aid and reconstruction. every one welcomes huminatarian aid like medicines and but reconstruction aid is an insult. thats why that Nov 19 conference shouldnot be held to begin with.
and chopper were 30 to 40. Pak should bought it for itself long time ago. Nations think ahead of time.

too right. some of the things said by some people in this forum are unbelievable.

This was bound to happen as how far can countries support each other ? Anyways, I agree with the poster who said that this is good for Pakistan. We need to become absolutely self reliant...and be the helpers than the helped.

thats a good one

what the hell kind of reasoning is that!

Why are people b1tching it was a privilage not a right, it has been removed for Saudi interests. Now it is upto Pakistan to work in it's own interests to get fuel that it needs to kep the economy rolling at the speed it is....from whatever source possible.

Guys please ignore H177, he is aytollah, irantullah, va mullah worshiping, America hating, red commie clue less idiot.

This is sad...mods just close the thread!

Fact is...

Pakistan is not like Iran or Saudi Arabia.
Pakistan is not loved like India.
Pakistan is not smart like Malaysia.
Pakistan is not as old as U.S, Canada or ANY Western country.

Pakistan is ONLY 59-60 years old and it is developing; Inshallah it'll become into a properly developed nation like the U.S is another 50-60 years. All is needed are determined people and a fair hardworking society!

In percentage terms Pakistan's reliance on oil has decreased but in absolute terms its still on a rise.

I think its time the government starts executing projects to reduce reliance on oil. Oil prices are not going to go down that much anymore.

Gas pipeline with Iran/Qatar
Thar coal project
Nuclear power plant deal with China
Hydropower and Hydel (Dams)

The above projects need to be executed on an urgent basis with no further delay.

On one hand, you despise the West and on the other hand you ask Pakistan to follow some of their policies. Anyways, retired generals have a good grasp of foreign affairs as they have a solid background. As long as they are retired, it should be OK.

why not do what the Brazilians are doing and trying to get everyone to run their cars on ethanol? Its cheap and clean fuel and would cut our import bill by a considerable amount.

it makes sense, all we need is technology and political will. As far as the technology is concerned the Brazillians are willing to offer that kind of help to Pakistan.