ECC set to approve first commercial bonded oil storage policy today, positioning country as regional fuel hub

According to Business Recorder, the Economic Coordination Committee of the Cabinet is set to review revised guidelines today that would let foreign suppliers import petroleum products through customs-bonded storage. A bonded storage policy was greenlit in June 2023, yet no overseas supplier has built a facility under it. Officials say a Strait of Hormuz disruption has exposed weaknesses in energy security, which has led the Petroleum Division to focus on bonded storage and strategic reserves.

The framework would cover crude oil, petrol, diesel, jet fuel, fuel oil, LPG and LNG held for foreign suppliers, excluding sanctioned goods. Approved sites including Port Qasim and Gwadar could hold bonded stock, with taxes due only once products are cleared for home use. The Commerce Ministry and SBP endorsed the plan, but FBR still has concerns about the 1969 customs law and the 1990 sales tax law.

Speaking in Lahore, Petroleum Minister Ali Pervaiz Malik said the plan would make Pakistan a regional storage hub for Gulf producers and traders. He also outlined gas sector deregulation and the unbundling of the Sui companies under a World Bank-assisted roadmap, while noting offshore exploration has resumed after two decades with Mari Petroleum, PPL and OGDCL taking part. HUBCO CEO Kamran Kamal described the sector as still weighed down by circular debt, steep tariffs and ageing transmission networks.