Saudi Arabia halts Supply of Oil loan, over deferred payments to Pakistan: Pak reacts

Pakistan’s absurd insistence on the Kashmir issue and its rivalry with India has sidelined it on the world stage.
The biggest oil producer of the world Saudi Arabia has stopped supply of oil to Pakistan as a deal signed between the two close allies for provision of $3.2 billion worth of the fuel under the arrangement expired two months ago.
Pakistan has not received oil on deferred payments from Saudi since May and the latter is yet to renew an agreement with Pakistan.
The USD 3.2 billion Saudi oil facility was part of the USD 6.2-billion Saudi Arabian package announced in November 2018 to ease Pakistan’s external sector woes, the Express Tribune reported on Friday.
Pakistan’s absurd insistence on the Kashmir issue and its rivalry with India has sidelined it on the world stage.
On this note now the Organization of Islamic Countries (OIC), a former longtime supporter of Pakistan on Kashmir, has decided to stand with India on the Kashmir issue with its most influential member Saudi Arabia taking the lead.
Pak PM Imran Khan and the government threatened to split the Organization of Islamic Countries (OIC) over Kashmir.
Meanwhile, the agreement expired in May and efforts are underway to renew the facility, Petroleum Division spokesperson Sajid Qazi was quoted as saying by the paper.
“Pakistan is awaiting a response from the Saudi government over its request to further extend the facility, he added.” Pakistan has already prematurely returned $1 billion Saudi loan – four months ahead of its repayment period. Pakistan could also return $2 billion remaining Saudi cash loan, subject to availability of similar facility from China.

The agreement over $3 billion cash support and $3.2 billion oil facility per annum had the provision of renewal for two more years. Saudi Arabia has not traded due to deferred payments since May this year,” according to The Express Tribune.

The budget estimates suggested that the Pakistan government was hoping to receive minimum $1 billion worth of oil in the fiscal year 2020-21, which started in July.

A Pak oil ministry spokesman said that the response from the Saudi Arabian government was awaited over Pakistan’s request to further extend the facility, in line with the provision of the agreement.

The development comes at a time when Pakistan faces a challenging situation as its IMF programme also remains technically suspended for the last five months.

Saudi had rolled over its USD 3 billion loan from between November 2019 and January 2020. The International Monetary Fund (IMF) has termed the rollovers of Saudi Arabian, United Arab Emirates (UAE) and Chinese assistance critical for Pakistan’s debt sustainability.

Pakistan’s repayment of USD 1 billion Saudi Arabian loan after borrowing from China and expiry of the oil facility underscores challenging relations between two Islamic nations, the report noted.

On the other hand, Pakistan’s Foreign Minister Shah Mehmood Qureshi during a talk show on a news channel had threatened that if the OIC headed by Saudi Arabia did not convene a foreign ministers’ meeting on Kashmir, Prime Minister Imran Khan would hold it on his own with his allies among the Islamic countries.
“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…,” he threatened on Ary news channel.
The OIC, the biggest bloc of Islamic countries in the world, has repeatedly declined Islamabad’s several requests to hold a meeting on Indian Kashmir — a region which Pakistan Army attempted to invade four times in the last seven decades and where it has been waging a proxy war against India for last three decades.
Since August 2019 when India revoked the special status of the Jammu and Kashmir state and brought it directly under the control of the Central government by bifurcating it into two Union Territories, the Imran Khan government has been seeking support of the 57-member OIC over the issue in Pakistan’s favour.
One of the major reasons for OIC’s lack of support for Pakistan has been Riyadh’s displeasure with Islamabad’s proximity with Turkey’s President Recep Tayyip Erdogan who nurtures the ambition of replacing Saudi Arabia as leader of all the Sunni Islamic countries.

(With agency inputs)

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