Staff Report
ISLAMABAD: The Directorate General Oil OF the Petroleum Division has asked Printing Corporation of Pakistan Press for publication of Policy Guidelines regarding Imports on Foreign Supplier’s Account through Custom Bonded Storage Facilities in the Gazette of Pakistan, making them accessible to the general public.
The policy guideline notification comes in the wake of a decision made by the federal cabinet’s economic coordination committee (ECC) during its meeting on June 27, 2023. The ECC approved a comprehensive policy guideline titled “Import on Foreign Supplier’s Account Through Custom Bonded Storage Facilities,” which was subsequently ratified by the federal cabinet through decision No. 382/Rule-19/2023 dated June 28, 2023.
The guidelines aim to address Pakistan’s reliance on imported petroleum products, considering the limited local refinery supplies. They seek to facilitate and encourage international oil suppliers to invest in storage and trade of crude oil and petroleum products within Pakistan, diversify supply sources, and leverage freight economies of scale.
Key provisions of the policy guideline include allowing foreign suppliers or their registered subsidiaries to maintain inventory of crude oil and petroleum products in bulk form in their private bonded warehouses or customs public bonded warehouses throughout Pakistan, without foreign exchange remittances.
Foreign suppliers have the option to establish registered businesses or operate through subsidiary companies in Pakistan, complying with local laws and rules for conducting operational and business activities on behalf of foreign suppliers.
The policy permits the development of dedicated storage infrastructure by these subsidiaries, enabling the utilization of customs public bonded warehouse facilities, licensed by the Oil and Gas Regulatory Authority (OGRA) under the Pakistan Oil (Refining, Blending, Transportation, Storage, and Marketing) Rules 2016.
Consignees, who operate these customs bonded warehouses, will be registered with the Inland Revenue, Federal Board of Revenue (FBR), under the Sales Tax Act, 1990, as importers and exporters.
The policy also outlines procedures for selling goods to licensed purchasers (refineries or Oil Marketing Companies) in U.S. Dollars or Pakistani Rupees. Pricing mechanisms will be determined by the government or OGRA as applicable.
Notably, the policy emphasizes compliance with import restrictions, quality standards, and the testing of petroleum products by the Hydrocarbon Development Institute of Pakistan (HDIP). It also seeks to prevent compromise of local purchasers’ allocations and mandates monitoring and regulation by various authorities, including the FBR, State Bank of Pakistan (if required), OGRA, and the Ministry of Commerce.
Furthermore, the policy allows for the re-export of crude oil and petroleum products, subject to compliance with specific conditions and notifications to relevant authorities, facilitating a structured approach to imports and exports under this arrangement.
