Special Report
ISLAMABAD: The Petroleum Division has put forth a policy guideline aimed at resolving procurement challenges faced by smaller Oil Marketing Companies (OMCs) and oil importers.
The proposal seeks to allow import on foreign supplier’s account through custom bonded storage facilities, presenting a potential solution to Pakistan’s import dependence.
The proposed policy suggests that foreign suppliers maintain inventories of crude oil and petroleum products in their own Customs Public Bonded Warehouses near Pakistani ports, without foreign exchange remittances. These products can then be sold to local purchasers or re-exported to other countries. To facilitate operations, foreign suppliers would establish a subsidiary company registered in Pakistan to handle business activities.
The Consignee, as the subsidiary company, would develop dedicated storage infrastructures around port premises, licensed by OGRA. They would sell goods to Pakistan licensed purchasers without the need for LC confirmation from international banks or advance payment. The Consignee would file an EIF and GD for Ex-bonding, clearing bonded goods for custody transfer to local purchasers upon payment of duties and taxes.
The proposed policy offers several benefits, including shorter procurement time, flexibility in currency choice, and cost savings on banking charges. It ensures a stable supply chain, reduces congestion at ports, and addresses issues related to international banking and foreign exchange liquidity. The policy aims to attract foreign investment in bulk warehousing and generate employment opportunities.
The summary, authorized by the Prime Minister, will be submitted to the Economic Coordination Committee (ECC) for approval. Once approved, the Ministry of Commerce will notify the policy provisions, while the FBR, SBP, and OGRA will oversee and regulate the import and export procedures.
