Saudis bail out Pakistan with $5.9bn oil facility

* Agreement to last until end of current fiscal year
* Saudi Arabia sells about 110,000 barrels of crude oil daily to Pakistan

By Iqbal Latif

JEDDAH: Saudi Arabia agreed in principle on Saturday to defer payments for crude oil sales to Pakistan expected to be worth about $5.9 billion during the 2008-09 financial year.

“There is an agreement ... to defer oil payments. The modalities are being worked out,” Finance Minister Naveed Qamar said in an interview with the Financial Times on Friday night.

While Qamar would not discuss the time-span for which payments on Saudi oil shipments would be deferred, a Petroleum Ministry official separately said that the agreement involved deferring payments until at least June 2009 when the financial year ended.

It was not clear if the deferred payments would have to be paid back. The Saudis in 1998 began supplying crude oil under a deferred payment plan after Pakistan carried out its maiden nuclear tests and came under international sanctions. In that previous case, after three years of deferred payments, the Saudis practically wrote off the payments. Insiders expect that there may be a similar write-off in the future of the deferred payments now under discussion.

Sources in Jeddah indicated to Daily Times that the Saudi economic package may contain a political element too, related to President Pervez Musharraf’s future. This bailout puts the Saudis in the driving seat, along with the Americans, as far as Pakistani internal and external politics is concerned, with both the Pakistan People’s Party and the Pakistan Muslim League-Nawaz (PML-N).

Apparently, the immediate impact will be on PML-N chief Nawaz Sharif’s politics of confrontation with Musharraf, which will have to be diluted significantly in line with ground realities. The Saudis, like the Americans, want a stable transition to civilian rule and no confrontation between the politicians and the military, including Musharraf.

Crude oil: Saudi Arabia sells about 110,000 barrels of crude oil daily to Pakistan or about 40 million barrels a year, which at $147 a barrel comes to about $5.88 billion. Pakistan imports a total of 202,000 barrels per day or approximately 73.7 million barrels a year – half of that from Saudi Arabia. Pakistan consumes a total of 370,000 barrels a day or about 135 million barrels a year. The gap between oil imports and consumption is filled with locally produced oil.

http://www.dailytimes.com.pk/default.asp?p...13-7-2008_pg1_1

Pakistans oil consumption is tiny its about as much as Israelis and they have only 6 million people.

Anyhow its another helping hand that Saudi has offered to Pakistan which joins the long list of favours Saudi has done to Pakistan. $6 billion is hell of alot of money and Saudi is defering it, its good news for our bank courrpt country but unfortuntaly our goverment will not allow it to help the average Pakistani.

It would be nice if it is not tied with "foreign policy suggestions".
after all if it is not free oil, then it is only a bailout for this govt. to continue the status quo.
people of pakistan will suffer with more debt and inflation as a result.
we need to live within our means instead.

A simple thank you is better than acting like a primitive moron like ingrate afghan who bark at his helper after getting help. At least show some decency, granted you hold extreme hatred like any Shia do against the Arabs. lets have loyalties to Pakistan and its interest and please stop this envious behavior. If you feel so much envy about Saudi help then go ask your favorites in Tehran to match the help.


Anyone wants Pakistan's attention, they have to win it by coming to its aid in hard times.

In this case, it's tied to NS cooling down, can't be a bad thing at all.
Also, Pakistan is in a financial crunch, it's a huge burden off our backs.

Consider it like a loan, where the deal is no interest-no payments for a few years.
I must admit, it's a very considerate gesture by KSA.

our rulers are eating up our today and tomorrow.
helping to over-eat is not friendship.

borrowing 6 billion today means that we are spending more on tomorrow's cost.
if we need to get rid of unsustainable spending habits anyway, why tomorrow and not today.
even Jonejo made some reforms to save sarkari petrol, why can't PP?

over all, I am not blaming Saudies here, and it may be a kind step from them in a critical time, but ...it is a fact loan never comes without dictation.. Saudies will just tell what thir masters tell them. am I wrong?

btw, psycho, are u from Jhang?

Seriously man, just like psycho said, stop acting like afghans, who bite the helping hand.

why r u biting on behalf of others. talk ur point with logic.
how this bailout is good if we need another of same size by end of the year?

Logic??? you speak of logic? why do we cuss at afghans when they act unthankfully, after all we have done for them over the decades, when we ourselves shamelessly diss Saudis everytime they help us, this is just pathetic. Agreed we cannot keep on living on handouts like this forever, but thats our fault and incompetency, why start a string of allegations against a friendly country that has always helped us, in thread about another instance of generosity displayed by the brotherly nation? we must show some decency if we demand the same from others whom we help.

It helps us avert the current balance of payment crunch and gives us room to put pur house in order, but that doesn't mean anything to you does it, you are shamelessly saying that they should do more instead of being grateful.

Is there something pushing u to "just bark". u can talk in a better way, or I have to come down to your level.
Saudies are supporting bad rulers to continue. this is what I am saying.

So much for the logic you love so much:D
is that the logical reply that you were talking about? Using phrases like "why r u biting on behalf of others." and "just bark" and still considering to be holding higher moral ground... sheesh.

Thanks to our Saudi brothers for bailing our corrupt country once again :)

u started with biting word....just scroll up and read ur own post above it.
psychosaint did it above u....but he is doing it out of sectarianism.....assuming me a Shiite.
Psycho can u tell me how one can be "Taliban Sympathizer" yet "Shiite" as a single time?
and what is PDF policy about sectarianism?

That was intended for certain afghans, you aren't an afghan are you? I just meant non of us should fall down to that level. Look, it would be wrong to generalize afghans too, but the thing is when some of them do such things it gives the entire nation a bad name, if we do that kind of thing in the face of a brother from Saudia, who has just given a good news of their help to our nation, it will give all of us a bad name, wouldn't you agree?

leave it...Saudies know that most likely they won't get the money back like last time. it is height of generousity.
thats why I am against this in our name.

Thanks to our Saudi brothers.

Here it comes and now i am being suspected of being from Jhang as i dared criticizing the mighty sinless shias for their bias against the ARABS.

The reason you are presenting for your opposition to the Aid coming from Saudia, the same reason can be argued against the AID from America.

America is heavily influencing our Foreign and domestic policy, yet i never heard any criticism from you about that. on the other hand, Saudis are not asking us anything or altering our foreign or domestic policy. they are simply helping because our "democractically elected" PM flew to Saudia to ask help.

Yet we have ingrates on board who are unable to see that.

As far as i can tell by reading my own words and that is true if any person who follow logic closely, he or she will be agree with me.

i did not say anything sectarian, I just pointed out the bias i have noticed among the shias against the Arabs.

i was rather pointing out and emphasizing that we ought not act like ingrates on our western border.

Once again our brother nation Saudi comes to aid Pakistan, jazakallah for all your help.