Saudi Arabia discusses economic support for Pakistan

Saudi Arabia is discussing measures to support Pakistan and its ailing economy, among them an option to extend the term of a $3bn deposit that the kingdom made into Pakistan's central bank last year, the countries said in a joint statement published by Saudi state news agency Spa on Sunday.

The kingdom deposited the sum in October as part of a wider $4.2bn support package to help stabilise the south Asian country's import-heavy economy at a time of increased pressure driven by rising commodity prices. The remaining $1.2bn came in the form of financing for the import of oil products from Saudi Arabia.

"The kingdom of Saudi Arabia affirmed its continued support for Pakistan… including the possibility of supporting the kingdom's deposit with the central bank of Pakistan amounting to $3bn by extending its term, or through other options," the statement said.

Saudi Arabia also agreed to "extend the agreement to finance exports of crude oil products and oil derivates" to Pakistan, the statement said, without providing further detail.

Pakistan is one of the largest gasoline importers in Asia-Pacific. It consumed around 744,600 t/month, or 210,000 b/d, of gasoline from July last year to February this year, according to latest data from the country's Oil Companies Advisory Committee (OCAC). And as much as 72pc of this was imported, according to Vortexa data.

Pakistan is also one of the few remaining Asian countries to still use high-sulphur gasoil. Its five refineries, which have a total capacity of 422,000 b/d, produce Euro-2 gasoil or higher-sulphur product to meet around 60pc of domestic gasoil demand. The remaining 40pc is met with imports.

The statement came at the end of a three-day visit to Saudi Arabia by Pakistan's recently elected prime minister Shehbaz Sharif, who has since travelled to the UAE to meet with the Crown Prince of Abu Dhabi, Mohammed bin Zayed.

By Nader Itayim