Saudi Financial Support to Continue in FY2025–26
ISLAMABAD — Saudi Arabia has decided to provide Pakistan with a $1 billion oil facility and extend the rollover of $5 billion in time deposits, the Pakistani Ministry of Finance confirmed this week. The assistance, announced for the fiscal year 2025–26, underscores Riyadh’s continued commitment to supporting Pakistan’s fragile economy.
According to officials, the oil financing arrangement—equivalent to roughly 290 billion Pakistani rupees—will allow Pakistan to import petroleum products on deferred payment terms. During the first quarter of the current fiscal year alone, Pakistan has already benefited from oil supplies worth more than 85 billion rupees (approximately $300 million).
Monthly Oil Support to Ease Import Pressure
Saudi Arabia currently provides $100 million per month in oil financing to Pakistan, which amounts to about 28.37 billion rupees. This measure helps Islamabad ease pressure on its foreign exchange reserves and stabilize fuel supplies amid rising global energy prices.
Energy imports remain one of Pakistan’s largest expenditure categories, accounting for nearly a quarter of the country’s total import bill. The Saudi facility enables Pakistan to reduce immediate dollar outflows and maintain smoother balance-of-payments management.
$5 Billion Deposits Rolled Over
In addition to the oil facility, Saudi Arabia has also rolled over $5 billion in deposits previously placed with Pakistan’s central bank. These funds were initially provided at an interest rate of 4% to support the country’s foreign exchange reserves.
Of the total amount, $2 billion was due in December 2025 and $3 billion in June 2026. The rollover means that the funds will remain with Pakistan for another term, effectively preventing a significant depletion of reserves in the coming months.
Boost to Pakistan’s Fiscal Stability
The combined support—valued at around 1.45 trillion rupees—is expected to play a crucial role in stabilizing Pakistan’s external finances. According to the Finance Ministry, the assistance will provide budgetary support and reinforce ongoing reforms aimed at restoring investor confidence.
Pakistan, which recently completed a short-term program with the International Monetary Fund (IMF), is in talks for a longer and larger facility to ensure macroeconomic stability. The Saudi support complements these efforts by offering short-term relief while the government implements structural reforms in taxation, energy pricing, and exports.
Strengthening Bilateral Ties
Saudi Arabia remains one of Pakistan’s closest economic partners. Over the years, Riyadh has extended multiple financial packages, investments, and deferred payment facilities to Islamabad. Analysts say the latest move not only reflects Saudi Arabia’s confidence in Pakistan’s reform agenda but also strengthens regional economic cooperation.
With global oil prices fluctuating and Pakistan facing persistent fiscal challenges, this renewed Saudi support provides both economic relief and a diplomatic boost to the government in Islamabad.
