Saudi Arabia come to Pakistan’s Rescue with $15 Billion Energy Bailout Deal

As soon as Nawaz Sharif’s PML-N emerged as the winning party in Pakistan’s recent elections, the Saudi Arabian ambassador in Islamabad contacted the Foreign Ministry to enquire about the details of Pakistan’s energy requirements.

Saudi Arabia, unwilling to work with the previous PPP party that ruled Pakistan who had favoured relations with Iran, is very keen to set up a relationship PML-N.

A deal has already been offered that would help the indebted country with its current energy crisis. Saudi Arabia will provide 100,000 barrels of crude oil and 15,000 tonnes of furnace oil on a deferred payment basis that would give Pakistan three years to pay for the fuels, valued at between $12 and $15 billion.

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An official from the Saudi government explained that “during the package period, the PML-N government can resolve the electricity crisis and develop hydropower projects through a combination of public and private investments and bagasse-based power production by the sugar industry.”

This is not the first bailout package that Saudi Arabia has offered to Pakistan. Between 1998 and 2002 economic sanctions levied against Pakistan, as a result of its nuclear programme, meant that they could not afford to buy the oil needed to supply the country with energy. Saudi Arabia organised a deal in which it supplied $3.5 billion of oil on a deferred payment basis to help Pakistan during its time of need.

By. Joao Peixe of Oilprice.com