Pakistan Moves to Create New Gateway for Global Oil Suppliers

**ISLAMABAD:** Pakistan is moving to establish a new mechanism allowing international oil suppliers to import petroleum products into the country, store them in customs-bonded facilities and sell them to local oil marketing companies and refineries or re-export them, potentially strengthening energy security and positioning Pakistan as a regional petroleum trading hub.

The Petroleum Division has forwarded its **168-page Policy Guideline on Import on Foreign Suppliers’ Account through Customs Bonded Storage Facilities-2026** to the Economic Coordination Committee (ECC) for approval.

The proposed framework covers key energy commodities, including crude oil of all grades, motor spirit, high-speed diesel, jet fuel, furnace oil, LPG and LNG. It envisages bonded storage facilities at strategic locations including Port Qasim, KPT/Kemari, Hub, Gwadar, Mahmood Kot and Machike Sheikhupura, subject to applicable regulatory, safety and licensing requirements.

### Foreign Suppliers to Hold Stocks Under Bond

A key feature of the proposed policy is that foreign suppliers, particularly major Middle Eastern producers and trading companies, would be able to import petroleum cargoes into Pakistan on their own account and hold them in customs-bonded storage without immediately incurring domestic duties and taxes.

Under the proposed mechanism, suppliers could operate through a registered liaison office or a locally established branch or incorporated company acting as their consignee. They could either develop dedicated storage facilities or utilise licensed public and private bonded storage facilities.

The arrangement would allow suppliers to bring petroleum products into Pakistan, hold them under customs bond and subsequently decide whether to sell them in the domestic market or re-export them depending on market conditions.

This would potentially transform Pakistan from a conventional destination market into a strategic storage and trading location for regional petroleum flows.

### Boost to Energy Security

The proposed framework could have significant implications for Pakistan’s energy security by enabling larger volumes of petroleum products to be physically stored within the country without necessarily being immediately released for domestic consumption.

Such inventories could provide greater flexibility during international supply disruptions, allowing petroleum stocks to be made available more quickly when required rather than relying entirely on the timely arrival of new import cargoes.

The policy also allows bonded petroleum products to be transported through the national pipeline network from port-based facilities to approved inland storage locations, including Mahmood Kot and Machike Sheikhupura, without triggering duties or taxes merely because the products are moved while remaining under bond.

Bonded products could also be transferred between approved storage facilities, pipelines, refineries, ports and export terminals under customs-supervised transit.

### Tax-Free Bonded Regime

Another major attraction for international suppliers is the proposed tax-neutral treatment of petroleum products while they remain within the bonded regime.

According to the policy, no tax, duty, levy, charge or cess, along with corresponding federal or provincial registrations, would apply to bonded goods until they are debonded for domestic consumption, subject to the applicable legal framework.

The arrangement could significantly reduce the cost of maintaining petroleum inventories in Pakistan and improve the country’s attractiveness for international oil companies, trading houses and commodity suppliers considering a regional storage presence.

### Re-Export Flexibility

The proposed policy would also allow foreign suppliers to re-export bonded petroleum products, except where the goods are subject to international sanctions or fall under the applicable Negative List.

This combination of access to Pakistan’s domestic market and the ability to redirect inventories to international markets could make the country more attractive to global petroleum traders seeking flexible regional storage options.

The proposed infrastructure network would further enhance this flexibility by linking port-based storage with inland facilities through the national petroleum pipeline system.

The identification of Mahmood Kot and Machike Sheikhupura as approved inland locations would enable suppliers to position stocks closer to major consumption centres while retaining the option of re-exporting them.

For Pakistan, the policy could lead to a more distributed petroleum supply system, greater supplier diversification and improved availability of stocks during periods of international market volatility.

For foreign suppliers, it offers an opportunity to maintain inventory in Pakistan, access the domestic market when commercially viable and re-export products when international market conditions are more favourable.

If approved and effectively implemented, the framework could therefore provide Pakistan with both a strategic energy-security buffer and a potential new role as a regional petroleum storage and trading hub.

Story by Khalid Mustafa