• ECC approves scheme covering crude oil, petrol, diesel, jet fuel, LPG and LNG
• Foreign suppliers can sell bonded fuel to local OMCs, refineries; get access to national pipeline network
• FBR opposes the policy
• Hormuz disruptions trigger review of energy supply chains

ISLAMABAD: In view of recent supply disruptions following the closure of the Strait of Hormuz, the government on Monday formally approved allowing foreign fuel suppliers to set up bonded storage facilities in Pakistan at their own expense for multiple purposes, including re-export and supplies to the local market.

Subject to formal ratification by the federal cabinet, the new policy guidelines on “Import on Foreign Supplier’s Account through Customs Bonded Storage Facilities” will come into force immediately. The guidelines have been pending since June 2023.

The policy guidelines were approved at a meeting of the Economic Coordination Committee (ECC) of the cabinet presided over by Finance Minister Muhammad Aurangzeb.

The ECC “approved a summary with proposal of Petroleum Division to allow import of petroleum products on foreign suppliers account through Customs bonded storage facilities. The proposal focused on the development and strengthening of the key pillars of the country’s energy security architecture in the oil and gas sector, which includes indigenisation, development of strategic petroleum reserves and promotion of Customs bonded storage facilities to ensure a resilient and sustainable petroleum supply chain”, an official statement said after the meeting.

The recent Strait of Hormuz disruptions compelled the government to look into supply chain vulnerabilities in terms of national energy security. The FBR had opposed the policy due to its own collection and monitoring challenges, but almost all other stakeholders supported the petroleum minister’s proposal to proceed with bonded warehouses and had been engaging with key suppliers in the Middle East.

The policy guidelines cleared by the ECC will cover the import of all grades of crude oil, motor spirit, high-speed diesel (HSD), jet fuels, furnace oil, LPG and LNG on foreign suppliers’ accounts through Customs bonded storage facilities in Pakistan and will be subject to Ogra’s approved product specifications. This will, however, not cover goods under international sanctions binding on Pakistan or those listed in the Negative List of the Import Policy Order, 2022.

The policy covers domestic sales to OMCs and refineries. Foreign suppliers will be allowed to maintain bonded inventory for the purpose of local sale at both private and public bonded storage terminals, including dedicated storage terminals, at approved locations, including Port Qasim Authority, KPT/Keamari, Hub, Gwadar Port or any other designated port at Mahmood Kot and Machike Sheikhupura.

For the purpose of import into bonded storage and re-export, both private and public bonded storage terminals at ports are approved locations subject to compliance with relevant laws and regulations of respective regulatory authorities.

Foreign suppliers

Foreign suppliers, through their consignees, will have access to the national petroleum pipeline network to move bonded inventory in bond from port-based approved locations to inland approved locations for the purpose of local sales to licensed OMCs and refineries. No duty or tax will be triggered by such bonded pipeline movement. Goods declaration (GDs) filing requirements will apply.

These guidelines will not affect or alter the existing regime for imports of petroleum products by licensed OMCs and refineries under their own accounts. The existing OMC import regime will continue unchanged and in parallel with this scheme.

The foreign supplier, through its consignee, will be allowed to maintain inventory of crude oil and other products listed above in both private and public bonded storage, including dedicated storage terminals.

The foreign supplier or its consignees will have the option to develop their own dedicated storage infrastructure or utilise private or public bonded warehouse facilities and dedicated storage terminals, subject to relevant regulatory approvals under the Customs Act, 1969 and port authorities.

The consignee’s bonded storage facility, whether a public bonded warehouse, private bonded warehouse or dedicated storage terminal, will be licensed by Customs after fulfilment of requirements for operating as a bonded warehouse for storage. They will not be required to register with the FBR under the Sales Tax Act, 1990 as a condition for commencing operations under this policy.

Domestic sales

For domestic sales of bonded goods to OMCs, all sales tax obligations, including registration as importer under the Sales Tax Act, 1990, filing of returns and payment of sales tax, will apply solely to the OMC or refinery as importer of record at ex-bonding. The foreign supplier and consignee will have no sales tax registration requirement, no return-filing obligation and no liability to pay sales tax in respect of domestic sales.

Under the policy guidelines, concessions will be granted to the consignee and foreign supplier to ensure they remain tax-neutral in Pakistan in respect of bonded storage, blending, trading and re-export operations.

At the time of storing goods received under the scheme, consignees will not be required to file an Electronic Import Form (EIF) with their GD for in-bonding. The following system changes are required to operationalise this arrangement: (i) a joint SBP/FBR circular enabling multiple partial EIFs to be drawn against a single in-bond cargo GD; and (ii) WeBOC configured to track cumulative ex-bonded quantity and accept NOC-based ex-bond GDs.

Published in Dawn, August 25th, 2026