Pakistan approves tax-neutral oil storage policy for Saudi companies

Pakistan has approved a tax-neutral bonded policy allowing Saudi companies to keep commercial oil reserves in the country without local tax liabilities, Petroleum Minister Ali Pervaiz Malik said during a meeting with Saudi Arabia’s ambassador on Friday, October 30.

The policy draws on arrangements at international energy hubs such as Fujairah and Singapore. Malik said storage in Pakistan could give Saudi Arabia more flexibility over supply routes and access to regional markets, while offering an alternative to shipping through the Strait of Hormuz and the Bab el-Mandeb Strait.

Malik also outlined plans for a petroleum storage and refining complex at Hub, Balochistan. The proposed facility is designed to accommodate Very Large Crude Carriers, and is intended to support Pakistan’s role in energy trade with China and Central Asian markets. The plans are under the guidance of Technip Energies UK.

The discussions included potential Saudi investment in Pakistan’s refinery upgradation programme, which aims to modernise facilities, improve operational efficiency and move towards Euro 5 fuel standards. The two sides also discussed possible additional crude oil purchases from Saudi Aramco and dedicated liquefied petroleum gas shipments, including for winter demand.

Malik thanked Saudi authorities for prioritising crude shipments to Pakistan through Yanbu during disruptions in international energy markets. The Saudi ambassador said the embassy in Islamabad had introduced same-day processing of visa applications for Pakistani citizens.