The Economic Coordination Committee (ECC) of the federal cabinet approved on Monday, August 24, 2026, a policy framework that permits foreign fuel suppliers to establish customs-bonded storage facilities in Pakistan at their own expense. The guidelines, formally titled “Import on Foreign Supplier’s Account through Customs Bonded Storage Facilities,” will take effect immediately after ratification by the full federal cabinet. They had been pending since June 2023.

The decision, taken at an ECC meeting chaired by Finance Minister Muhammad Aurangzeb, follows supply disruptions caused by the recent closure of the Strait of Hormuz. The Petroleum Division submitted the summary, which the ECC approved as part of a nine-item agenda that also included a USD 153.855 million government guarantee for PIAIL and a new sale-and-purchase agreement between PSO and Oman’s OQ Trading.

Which products and locations are covered

The policy covers imports of all grades of crude oil, motor spirit (petrol), high-speed diesel (HSD), jet fuel, furnace oil, liquefied petroleum gas (LPG) and liquefied natural gas (LNG). All imported products must comply with specifications approved by the Oil and Gas Regulatory Authority (OGRA). Goods subject to international sanctions binding on Pakistan or listed in the Negative List of the Import Policy Order, 2022, are excluded.

Approved storage locations include Port Qasim Authority, KPT/Keamari, Hub and Gwadar Port, as well as inland sites at Mahmood Kot and Machike, Sheikhupura. Foreign suppliers or their consignees may develop dedicated storage terminals or use existing private and public bonded warehouses, subject to approvals under the Customs Act, 1969 and port regulations.

Tax treatment and the role of domestic buyers

Foreign suppliers and their consignees will not be required to register with the Federal Board of Revenue (FBR) under the Sales Tax Act, 1990, as a condition for commencing operations. The policy grants them tax-neutral status for bonded storage, blending, trading and re-export activities.

When bonded products are sold domestically, the purchasing oil marketing company (OMC) or refinery becomes the importer of record. That buyer must:

  • File the relevant ex-bond goods declaration.
  • Submit the Electronic Import Form through its designated bank.
  • Pay applicable customs duty, sales tax and other charges at the point of ex-bonding.

The existing import regime for licensed OMCs and refineries remains unchanged and will operate alongside the new mechanism.

Pricing, pipeline access and re-export rights

Foreign suppliers may sell bonded products to Pakistani OMCs and refineries at commercially negotiated prices. OGRA-regulated prices apply only to the onward domestic sale by the local purchaser and do not restrict the foreign supplier’s pricing arrangements or its unconditional right to re-export bonded goods at any time.

Suppliers, through their consignees, may use the national petroleum pipeline network to move bonded inventory from port-based locations to inland approved sites. No customs duty or tax is triggered by such pipeline movements, though goods declaration filing requirements apply.

Emergency requisition powers

The government may requisition bonded petroleum stocks in a formally declared emergency: war, armed conflict, a major natural disaster, or a complete and documented collapse of domestic supply. Routine shortages, price fluctuations or geopolitical developments that do not cause actual supply disruption do not qualify.

If invoked, the government must issue a formal notice specifying product, volume and delivery point. Requisitioned stocks must be purchased and removed within 14 days. Compensation is set at the weekly average Platts price assessment for the relevant product, paid in foreign currency within 15 calendar days of delivery. The government cannot require consignees to maintain additional reserve stocks solely for potential requisition.

Monitoring and operational requirements

Consignees must report bonded petroleum inventories to OGRA daily, disaggregated by product grade and storage location. The data will feed into a central regulatory database accessible to relevant authorities.

Bonded storage facilities must be licensed by Customs after fulfilling prescribed requirements. The government has identified technology and regulatory changes needed to operationalise the framework, including modifications to the WeBOC customs system and coordination between the State Bank of Pakistan and FBR to facilitate partial Electronic Import Forms against single in-bond cargo declarations.

The FBR had raised concerns about collection and monitoring challenges, but other key stakeholders supported the initiative, particularly in light of the need to strengthen supply chains and engage Middle Eastern suppliers.

The policy is expected to give foreign suppliers flexibility to maintain strategic inventories in Pakistan while providing domestic OMCs and refineries an additional source of supply.