November 04, 2008	Tuesday	Ziqa'ad 5, 1429

ISLAMABAD, Nov 3: Pakistan will seek 110,000 tons of crude oil per day from Saudi Arabia on deferred payment for a period of two years when President Asif Ali Zardari visits the kingdom on Tuesday, officials told Dawn.

A delegation comprising about 100 secretaries and senior officials, including Adviser to Prime Minister on Finance Shaukat Tarin and Petroleum Secretary G.A. Sabri, left for Riyadh on Monday for preliminary talks with Saudi officials.

Petroleum ministry sources told Dawn that Pakistan would propose that Saudi officials could retain remittances ($1.5 to $1.75 billion a year) of Pakistanis living there.

They said the transfer of remittances was a continuous process and the Saudi government could retain these in riyals, while Pakistani banks would make payment to the people in local currency.

In July and August when the crude price was at its peak in the international market, the petroleum ministry had calculated the value of Saudi supply for two years on deferred payment at around $4.8 billion.

But since the crude price has declined to about $60 a barrel, it now estimates that the Saudi supply will cost a little over $1 billion a year or near the value of remittances being sent by Pakistanis living in Saudi Arabia.

The officials said Mr Zardari would try to persuade the Saudi government to restore the special oil facility (SOF) which Pakistan had enjoyed after it carried out its nuclear tests in 1998 and came under international economic sanctions. The Saudi government had provided 80,000 barrels a day soon after the sanctions. The facility remained till 2001.

The Saudis extended the SOF for another year in 2002. On both occasions, the kingdom later converted the SOF into grants by writing off the deferred payment.

At present Saudi Arabia and the UAE are providing Pakistan crude on deferred payment for 30 days. Pakistan imports 82 per cent of its annual requirement -- around 250,000 barrels a day from Saudi Arabia, 150,000 from Abu Dhabi, 18,000 from Qatar and 15,000 barrels from Iran.In July, the government had requested the UAE and Qatar to grant Pakistan the SOF or let it import oil without interest or extend the credit facility to import oil on deferred payment.

In January, Kuwait extended the interest-free credit facility for oil to Pakistan’s caretaker government for 60 days. The facility will remain effective till the end of this year.