Pakistan seeks extension of $1.2bn deferred oil payment facility from Saudi Arabia

Islamabad: Pakistan has requested Saudi Arabia to extend its deferred oil payment facility worth $1.2 billion, seeking to ease pressure on the country’s balance of payments, sources said on Wednesday.

According to officials, Pakistan has asked the Saudi Fund for Development to defer oil import payments for an additional year.

Petroleum imports—primarily sourced from Saudi Arabia—constitute a major portion of Pakistan’s import bill. The deferred payment facility is seen as a crucial support mechanism that helps boost foreign exchange reserves and reduce external payment pressures.

Sources said the existing agreement for deferred oil payments is set to expire in March 2026.

Talks are currently underway between Pakistan’s economic team and Saudi authorities regarding the government’s request, sources added.

Sources indicated that if a new agreement is finalised, the deferred oil payment facility could be extended until February 2027.

A day earlier, the United Arab Emirates (UAE) extended the rollover of a $2 billion loan to Pakistan for a further one month, ARY News reported on Tuesday, citing sources.

According to sources, Pakistan has renewed its request to the UAE for the rollover of a total of $3 billion for a longer period.

The $2 billion loan had matured last month, while another $1 billion tranche is due to mature in July.

Sources said Pakistan has once again asked the UAE to roll over the loans for one year. Under the conditions of the International Monetary Fund (IMF) programme, Pakistan is required to secure the rollover of $12 billion in external loans during the current financial year.