ISLAMABAD (Mudassir Ali Rana) – Pakistan has formally requested Saudi Arabia to extend the “deferred oil payment facility” for an additional one year and to increase the credit repayment period from one year to at least two years, reliable sources told Dunya News.
According to sources, Pakistan’s economic team has conveyed the request to Saudi authorities seeking continuation of the facility to ease balance of payments pressure and manage external financing needs. Talks between Pakistani officials and Saudi counterparts are currently underway and are expected to be finalized soon, they added.
Sources said that the existing Saudi oil facility, amounting to $1.2 billion will remain effective until February 2026. Under the arrangement, Pakistan receives $100 million per month in deferred oil payments. The facility was activated at the beginning of last year, and the full $1.2 billion limit will be completed with the final instalment due in February 2026.
It has been learned that Prime Minister Shehbaz Sharif personally requested Saudi authorities to continue the deferred oil facility and extend the repayment period to help reduce pressure on Pakistan’s external accounts. A high level economic delegation from Pakistan is currently visiting Saudi Arabia to discuss investment opportunities and strengthen bilateral economic cooperation.
Sources said that Saudi Arabia currently holds $5 billion in deposits with Pakistan. Of this $2 billion which matured in December 2025 has already been rolled over for another year. The remaining $3 billion deposit is set to mature in June 2026, and discussions for its rollover are already in progress. Finance Ministry officials stated that there is sufficient time for the rollover and no obstacles are expected.
Under the deferred oil facility the Saudi Fund for Development has been disbursing $100 million monthly to Pakistan. The first instalment was received in February 2025 and payments have continued regularly. The instalment due in February will be the final one under the current agreement after which Pakistan will begin repayment from March 2026.
Sources noted that Pakistan has previously benefited from similar facilities from Saudi Arabia, which were included as part of the IMF extended fund facility (EFF) arrangement to help reduce external payment pressures. Pakistan is keen to continue the oil facility and secure the rollover of Saudi deposits while remaining under the IMF programme.
Saudi authorities have not yet given immediate approval and have sought time to review the request.
During meetings with the visiting Pakistani delegation Saudi officials emphasized the importance of structural reforms, sustainable economic growth and long-term stability. Various investment proposals are also under consideration. The Pakistani government has praised Saudi Arabia’s continued economic support while Saudi officials have appreciated Pakistan’s efforts toward institutional reforms.
Sources said that if the deferred oil facility is renewed, Pakistan is expected to receive $1.2 billion from Saudi Arabia over the next year with the facility potentially extended until February 2027.