Pakistan has asked Saudi Arabia to provide $6.7 billion in oil financing over 15 years as the government seeks to reduce immediate dollar requirements and ease pressure on foreign exchange reserves amid rising fuel import costs.
Finance Minister Muhammad Aurangzeb discussed the proposed arrangement with Saudi Fund for Development (SFD) CEO Sultan Abdulrahman Al-Marshad on the sidelines of the World Bank and International Monetary Fund annual meetings in Thailand. The talks focused on reviving the existing $1.2 billion annual oil facility that allows Pakistan to pay for imports on deferred terms.
The Finance Ministry has not disclosed Saudi Arabia’s response, but people familiar with the discussions said the Kingdom was examining the proposal.
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Saudi Arabia has provided oil to Pakistan on deferred payments since 2019. The latest agreement, signed in February 2025, expired in April. Pakistan is now seeking a longer-term arrangement to reduce its immediate external financing needs.
The request comes as the country’s fuel import bill continues to rise. Petroleum imports 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 climbed another 40 percent during July and August of the current fiscal year, according to the report.
The International Monetary Fund (IMF) has not included the proposed 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.
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Saudi Arabia has also extended $3 billion in short-term financing to Pakistan through the SFD. The facility was rolled over for three months in July, helping Pakistan meet debt repayment obligations to the United Arab Emirates.
Economic Affairs Ministry officials said the previous deferred oil facility carried an interest rate of 6 percent. Since 2019, the SFD has provided approximately $6.7 billion in financing for Pakistan’s oil imports.
During the meeting, Aurangzeb highlighted Pakistan’s improving macroeconomic position and renewed access to international capital markets. The two sides also discussed expanding trade and investment, increasing private-sector participation, 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 discussed developing a new pipeline of projects. The Saudi fund reaffirmed its continued support for Pakistan within its mandate.
