Pakistan seeks Iran oil on deferred payment

Written by Writer on Monday, October 13th, 2008

Pakistan seeks Iran oil on deferred payment

ISLAMABAD –– Pakistan has asked Iran to supply crude oil on a deferred payment basis to help ease balance of payments pressure, Pakistani Foreign Minister Shah Mehmood Qureshi said on Friday.

Speaking to reporters after a meeting with his Iranian counterpart Manouchehr Mottaki, Qureshi said Iran had assured that it would sympathetically consider Pakistan’s request.

“If that is done that will be a facility that Pakistan can avail and that will certainly help stabilize the economic situation and definitely ease the balance of payments within Pakistan,” he said.

Qureshi said under Iranian law crude oil could be imported on a deferred payment for a maximum of three months and Mottaki had said the Iranian government would consider extending it further.

Pakistan is seeking a similar concession from Saudi Arabia.

A Pakistani minister in July said Saudi Arabia had agreed in principle to defer payments for crude oil sales, but Pakistan is still waiting for this arrangement to begin.

Such concessions would provide considerable relief for Pakistan’s six-month-old government as it faces a balance of payments crisis that could result in it defaulting on a sovereign bond issue in February.

An adviser to the prime minister has said that Pakistan needs up to US$3 billion urgently in order to cover upcoming debt repayment obligations. While Pakistan has been a crucial U.S. ally in the war against terrorism, it has remained on good terms with neighboring Iran.

Pakistan has pursued a gas pipeline deal with Iran despite U.S. disapproval.

Mottaki hinted that Pakistan and Iran would go ahead with a trans-regional project to pipe Iranian gas to south Asia even without India.

India has been cautious about committing to the US$7.6 billion project as it wants to reduce the risk of supplies being cut during times of tension with Pakistan, as the two have already fought three wars.