Govt fails to secure $3.2b UAE oil facility

ISLAMABAD: Pakistan has not been able to secure $3.2 billion oil on deferred payments facility from the United Arab Emirates (UAE).
Finance Minister Asad Umar said that the UAE oil facility agreement will not materialize, adding that that the government has made alternative arrangements to meet its external financing needs for this fiscal year.
The reasons for cancellation of the $3.2 billion oil facility by the UAE could not be immediately ascertained. Last month, the UAE had also postponed a scheduled meeting of the Joint Ministerial Commission.
The $3.2 billion oil facility was part of the $6.2 billion that the UAE had announced to give to Pakistan in December to help the country passing through difficult economic times. The UAE has already transferred $2 billion cash into the coffers of the State Bank of Pakistan (SBP) and another $1 billion was expected very soon.
The development came amid a delay in finalisation of an agreement with the International Monetary Fund (IMF). The negotiations with the IMF are continued since October last year. Two ($2) billion dollar loans are also expected from China next week, said the Finance Ministry that tried to downplay the cancellation of $3.2 billion UAE oil facility.
The $3.2 billion UAE oil facility was expected to take the pressure off from the foreign exchange market besides stabilising the official foreign currency reserves. Pakistan arranged $3 billion cash from Saudi Arabia at 3.2% interest rate. The UAE cash support has been secured for a period of two years at an interest rate of 3%, according to a written reply that Asad Umar submitted in the Senate last week.