Pakistan has asked Saudi Arabia to consider a 15-year oil financing facility worth $6.7 billion as the government seeks to reduce immediate external financing needs and ease pressure on foreign exchange reserves amid rising fuel import costs.
Finance Minister Muhammad Aurangzeb raised the revival of the existing $1.2 billion annual oil facility on deferred payments with Saudi Fund for Development (SFD) Chief Executive Officer Sultan Abdulrahman Al-Marshad on the sidelines of the World Bank and International Monetary Fund annual meetings in Thailand.
The Finance Ministry did not disclose Saudi Arabia’s response to the request. However, people familiar with the discussions said the Kingdom was examining the proposal.
Saudi Arabia has provided Pakistan with oil on one-year deferred payments since 2019. The most recent facility, signed in February 2025, expired in April. Pakistan is now seeking a longer-term arrangement to reduce its immediate external financing requirements.
The proposed facility comes as Pakistan faces rising fuel import costs and substantial external financing needs. Its petroleum import bill increased 5.8 percent to $16.8 billion in fiscal year 2025-26, while crude oil import costs rose 32 percent to $7.2 billion. Crude oil import costs increased another 40 percent during July and August of the current fiscal year, according to the report.
The International Monetary Fund has not included the Saudi oil facility in its projected inflows for Pakistan for fiscal years 2026-27 and 2027-28, according to its third staff-level report. Government officials believe a long-term agreement could help offset the impact of higher fuel import costs.
Saudi Arabia also extended $3 billion in short-term financing to Pakistan through the SFD, which was rolled over for three months in July. The funds helped Pakistan meet debt repayment obligations to the United Arab Emirates.
The interest rate on the previous deferred oil facility was 6 percent, according to Economic Affairs Ministry officials. Since 2019, the SFD has provided approximately $6.7 billion in financing for oil imports.
During the meeting, Aurangzeb also highlighted Pakistan’s improving macroeconomic position and renewed access to international capital markets. The two sides discussed expanding trade and investment, strengthening private-sector engagement, following up on the bilateral investment protection agreement and exploring refinery upgrades.
The Finance Ministry said both sides reviewed progress on SFD-supported projects and stressed the need to develop a new pipeline of projects. The SFD reaffirmed its continued support for Pakistan within its mandate.
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