Saudi Arabia has decided not to renew an agreement with Pakistan that allowed the supply of crude oil to Pakistan on deferred payments. The agreement expired two months ago. As per the agreement, there was a provision of oil worth $3.2 billion on deferred payments per annum. The Express Tribune Pakistan reported that the renewal agreement is still pending. The development came after Pakistan had threatened to split the OIC, (Organisation of Islamic Cooperation) headed by Saudi Arabia.
China helped Pakistan to pay back $1 billion to Saudi Arabia
Recently, Pakistan also paid back $1 billion Saudi loans with the help of China four months ahead of the repayment period. The agreement between Saudi Arabia and Pakistan had a provision of renewal for two more years. Still, Saudi seems to have decided not to go ahead with the renewal as it stopped oil supply in May itself.
The Pakistan government was hoping to get at least $1 billion worth of oil this fiscal year that started in July. The oil ministry of Pakistan said that they are still waiting for a reply of the Saudi Arabian government over the renewal.
Pakistan had threatened to split the OIC
A few days ago, Pakistan had expressed displeasure over the refusal of Saudi Arabia led OIC to hold a meeting on Kashmir on its request. Pakistan has been asking the OIC, the biggest bloc of Islamic countries in the world, to hold a meeting of the foreign ministers of the member nations to discuss Kashmir.
Pakistan’s Foreign Minister Shah Mehmood Qureshi had said to a TV channel, “I am once again respectfully telling OIC that a meeting of the Council of Foreign Ministers is our expectation.” After that he had added, “If you cannot convene it, then I’ll be compelled to ask Prime Minister Imran Khan to call a meeting of the Islamic countries that are ready to stand with us on the issue of Kashmir”, which basically meant threatening to form a separate group of Islamic countries.
Despite Pakistan’s repeated requests, OIC has refusing to discuss the issue of Kashmir, reflecting the goodwill the Modi govt has earned among the Arab countries.
Pakistan and it’s terrible luck in procuring oil from Arab countries
In 2018, United Arab Emirates had announced a $6.2 billion package for Pakistan. It included the $3.2 billion oil facility. However, later UAE reduced the financial assistance to $2 billion and cancelled the plan to provide $3.2 billion worth oil facility on deferred payments. Then in February 2019, when the Saudi crown prince visited Islamabad, the two countries signed an agreement that allowed Pakistan import of petroleum products, crude oil and LNG from Saudi Arabia under a financial package.