Thursday, November 28News and updates from Kashmir

Saudi Stops Oil Supply on Deferred Payments to Pakistan after Threats to Split OIC over Kashmir

Hostility between lifelong allies Pakistan and Saudi Arabia seems deteriorating with every passing day.

Pakistan’s Foreign Minister (FM) Shah Mahmood Qureshi recently made a statement where he threatened, if the Organisation of Islamic Cooperation (OIC), headed by Saudi Arabia, did not convene a foreign ministers’ meeting on Kashmir, Prime Minister Imran Khan would hold a meeting on his own with his allies among the Islamic countries. The statement is being seen as an unusual move by the Pakistani FM who is known for his diplomatic skills across the world. In a strongly-worded statement in a private TV show, he demanded the Muslim world to come together and listen to the people of Kashmir.

The foreign minister said: “I am once again respectfully telling OIC that a meeting of the Council of Foreign Ministers is our expectation. If you cannot convene it, then I’ll be compelled to ask Prime Minister Imran Khan to call a meeting of the Islamic countries that are ready to stand with us on the issue of Kashmir and support the oppressed Kashmiris.”

Now, Saudi Arabia has stopped supply of oil to Pakistan since May as a deal signed between the two close allies for provision of USD 3.2 billion worth of the fuel under the arrangement expired two months ago.

The loan package included a provision under which Saudi Arabia granted Pakistan $3.2 billion worth of oil, a year on deferred payments.

Pakistani media on Saturday (8 August) said that the provision meant for Islamabad expired two months ago and has not been renewed by Riyadh.

Instead, Islamabad has prematurely returned $1 billion Saudi loans, four months ahead of the repayment period, The Express Tribune said quoting sources.

The oil facility of $4.7 billion from Saudi Arabia and IDB’s Islamic Trade Finance Corporation (ITFC) on deferred payment has been in a transitory phase as Islamabad has made fresh requests for renewal of both facilities for another one year.

The USD 3.2 billion Saudi oil facility was part of the USD 6.2-billion Saudi Arabian package announced in November 2018 to ease Pakistan’s external sector woes, the Express Tribune reported on Friday.

Analysts believe that the growing relationship between Pakistan and Turkey is the reason behind the widening gap between Pakistan and Saudi. Recently on Eid ul Adha Turkey’s President Rajab Tayib has called Pakistan’s PM Imran khan and has hoped for the brighter future relationships between the two countries.

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