Customs-bonded oil storage: ECC may consider revised policy for imports on foreign suppliers’ account

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet, scheduled to meet today (Monday), will consider revised policy guidelines for imports on foreign suppliers’ accounts through customs-bonded oil storage facilities, sources close to the Finance Minister told Business Recorder. The government had approved the policy guidelines for imports on foreign suppliers’ accounts through customs-bonded oil storage facilities on June 26, 2023. Subsequently, relevant stakeholders issued their respective standard operating procedures (SOPs), guidelines and rules for implementation. However, no foreign supplier has so far established a bonded storage facility under the policy. According to the proposal, the ongoing disruption in the Strait of Hormuz has highlighted vulnerabilities in the country’s energy security. To address the challenge, the Petroleum Division is focusing on strengthening key pillars of the energy security architecture in the oil and gas sector, including indigenisation, development of Strategic Petroleum Reserves (SPR), and promotion of customs-bonded storage facilities to ensure a resilient and sustainable petroleum supply chain. READ MORE: PD to seek ECC nod on Foreign Supplier Import Policy In this regard, the Minister for Petroleum constituted a committee on May 7, 2026, to review the existing policy guidelines on customs-bonded storage facilities and propose recommendations for operationalising the policy. The committee subsequently held a series of meetings and sought input from major petroleum traders and suppliers before preparing a revised draft. The revised draft policy guidelines were circulated among concerned stakeholders on June 15, 2026, including the Ministries of Finance, Commerce, and Industries and Production; Ministry of Maritime Affairs; Federal Board of Revenue (FBR); State Bank of Pakistan (SBP); Oil and Gas Regulatory Authority (Ogra); Board of Investment (BoI); and Special Investment Facilitation Council (SIFC). FBR, SBP, the Ministry of Commerce, Ministry of Maritime Affairs, SIFC and BoI subsequently conveyed their comments. Following these, particularly FBR’s observations, the proposed guidelines were substantially amended and re-circulated on July 23, 2026. While the Ministry of Commerce and SBP expressed support, FBR maintained reservations over certain key provisions. To build consensus, the Minister for Energy (Petroleum Division) chaired a committee meeting on August 5, 2026, attended by all members. The policy was further revised in light of comments from the Minister for Maritime Affairs and Chairman Ogra. FBR, however, reiterated reservations concerning provisions in the context of the Customs Act, 1969 and Sales Tax Act, 1990. The Petroleum Division maintains that the development of bonded storage facilities has become critical in view of the prevailing geopolitical situation in the region. It has therefore sought approval of the revised policy guidelines, along with amendments to relevant laws and regulatory and procedural frameworks required for their implementation. The proposed policy would cover imports of crude oil, motor spirit including premium petrol, high-speed diesel (HSD), jet fuel, fuel oil including furnace oil, LPG and LNG on foreign suppliers’ accounts through customs-bonded storage facilities in Pakistan. Goods subject to international sanctions binding on Pakistan or included in the Negative List of the Import Policy Order, 2022, would remain excluded. For domestic sales to OMCs and refineries, foreign suppliers would be allowed to maintain bonded inventories at private and public storage terminals at approved locations, including Port Qasim, KPT/Keamari, Hub, Gwadar, Mahmood Kot and Machike, Sheikhupura. For imports intended for re-export, port-based bonded storage facilities would be permitted at approved locations. Foreign suppliers, through their consignees, would also have access to the national petroleum pipeline network to move bonded inventory from port-based facilities to approved inland locations. Such movement would not trigger customs duty or taxes as long as the products remain within the bonded regime. The existing import regime for licensed OMCs and refineries would remain unchanged and continue in parallel with the proposed scheme. Application of the policy to individual petroleum products at specific bonded locations would, however, be subject to Ogra first notifying product-specific safety, insurance, containment and emergency-response protocols and confirming readiness for each product and location. A foreign supplier could participate through a liaison office registered in Pakistan or through a designated person, including a locally established branch or locally incorporated company, which would serve as the consignee. The consignee could develop dedicated storage infrastructure or use private or public bonded warehouses and dedicated storage terminals at approved locations, subject to licensing by Ogra and relevant approvals under the Customs Act, 1969 and port regulations. The consignee would not be required to register with FBR under the Sales Tax Act, 1990 as a condition for commencing operations. For domestic sales, sales tax obligations—including registration as importer, filing of returns and payment of sales tax—would rest with the OMC or refinery acting as importer of record at ex-bonding. The proposed policy also provides tax-neutral treatment for foreign suppliers and consignees in respect of bonded storage, blending, trading and re-export operations. Taxes, duties, levies and other charges would not apply while goods remain within the bonded regime and have not been released for domestic consumption. Foreign suppliers would retain flexibility to sell bonded petroleum products to local OMCs and refineries at commercially negotiated prices. The proposal states that such prices would not be subject to Ogra price notifications, while Ogra-regulated pricing would apply to onward domestic sales by local purchasers. The government would also retain a limited right to requisition bonded stocks during a formally declared emergency, such as war, armed conflict, a major natural disaster or a complete and documented collapse of domestic supply. Requisitioned stocks would be compensated at the prevailing international market price, based on the weekly average of the relevant Platts assessment. The proposal explicitly excludes routine energy shortages, price fluctuations and geopolitical developments that do not result in actual supply disruption from the emergency-requisition provision. The revised policy would permit re-export of bonded petroleum products without a Letter of Credit, advance payment, open contract or Electronic Export Form, subject to specified conditions. Ogra would have the first right of refusal over the final 10 percent of products stored under the scheme, with its decision required within two days; failure to respond within the stipulated period would constitute deemed approval. The consignee would file the relevant goods declaration for re-export, which would be processed within 24 hours. The proposal states that no prior approval from any regulator would be required for re-export. The FBR would also provide Ogra access to its management information systems to enable regulatory visibility of petroleum stocks held in customs-bonded storage. Consignees would be required to report their stocks to Ogra daily, broken down by product and storage location. Copyright Business Recorder, 2026

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