The federal cabinet has approved the agreement allowing the government to buy oil on deferred payments from the Kingdom of Saudi Arabia, reported 24NewsHD TV channel.

Sources informed the TV channel on Saturday that the cabinet gave its approval through a circulation summary. 

As per the agreement, the Saudi government would provide $100 million worth oil every month to the government of Pakistan on deferred payment. 

The economic division has dispatched the circulation summary to the cabinet. 

Saudi Crown Prince Mohammed bin Salman agreed to provide oil to Pakistan on deferred payment during Prime Minister Imran Khan’s visit to the kingdom. The Crown Prince vowed to provide oil on delayed payment for one year.

The government of Pakistan will have to pay a margin of 3.80% with the principal amount when it repays for the commodity. 

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According to the agreement, the contract is for one year but the period could be enhanced.

The Finance Ministry, State Bank of Pakistan and Federal Board of Revenue have agreed to the draft of the Pak-Saudi contract.

When all three agreed on the draft, the economic division sent the summary to the federal cabinet for approval. 

Reporter Awais Kiyani