Islamabad-Pakistan has requested Kingdom of Saudi Arabia to extend the oil facility on deferred payment after the one year agreement between both the countries for provision of $3.2 billion worth of oil expired.

“We have requested Saudi Arabia for the extension in the oil facility on deferred payment but I can’t say when it will get renewed,” the Special Advisor to Prime Minister on Petroleum Nadeem Babar said while addressing a joint press conference along with the Federal Minister for Energy Omer Ayub, Federal Minister for science and technology Fawad Chaudhry, SAPM on Power Shahzad Qasim and Secretary Power Omer Rasul. The Federal Ministers and SAPMs were briefing media regarding the salient features of Alternative Energy Policy-2019. In reply to a query, Nadeem Babar said that a wrong impression has been created that Saudi Arabia has refused to extend the oil facility on deferred payment. The renewal of the agreement is a normal process, he added. In first year Pakistan didn’t utilise the entire facility of $ 3.2 billion and now we have requested for its renewal for another year, Babar informed. 

Saudi Arab had extended $3.2 billion oil facility per annum with the provision of renewal for two more years. The agreement on oil for deferred payments per annum had expired in May 2020 and has not renewed yet. Minister for Power and Petroleum Omar Ayub Khan said the Council of Common Interests (CCI) had recently approved the new policy which will help to make the country self-sufficient in power generation. “We have the target to produce 20 per cent of the country’s total electricity through renewable by 2025 that will be taken to 30 per cent by 2030 from the current 5 per cent,” Omar Ayub said. He said that by adding 30 per cent hydropower, coal and nuclear by 2030 around 75 per cent of the total energy-mix needs to be fulfilled through indigenous resources. He said that under the new policy competitive bidding would be conducted which will bring down the electricity rates.”The solar energy projects that have been initiated during our tenure have brought down the rate even from four cents per unit,” he added. 

The minister said availability of inexpensive electricity would benefit industry and domestic consumers, besides creating more job opportunities. The new policy focusing on local manufacturing of the equipment such as solar panels, wind turbines, blades etc. Nadeem Babar said that in the beginning the country will import the equipment required for the renewable energy generation but later it will be produced locally. So far three Chinese and one European company have shown their interest in establishing their plants for the manufacturing of equipments for the renewable energy in Pakistan, Babar said. Federal Minister for Science and Technology said that, there is import mafia which are making local production expensive and imported cheaper by charging zero tax on furnished imported good and heavy tax on raw material. In the renewable energy policy the duties/tax structure has been revised and now there is zero tax on the equipments for renewable energy. This will help to attract the Chinese companies relocation to Pakistan. He said that when COVID-19 started Pakistan was importing every COVID related supplies. Now within few months Pakistan has become a major exporter of the COVID-19 supplies, he added.  He said that within one year Pakistan will establish its own industry for the production of renewable energy equipments.