Pakistan offers Saudi firms tax-neutral bonded oil storage
Pakistan has approved a tax-neutral bonded policy that lets Saudi companies set up commercial oil reserves in the country without local tax liabilities. Petroleum Minister Ali Pervaiz Malik shared the offer with Saudi Arabia's new ambassador.
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- Saudi companies can store oil in Pakistan without local tax liabilities under a bonded policy.
- The policy is benchmarked against Fujairah and Singapore.
- Talks also covered refinery upgrades, crude supplies and LPG shipments.
Pakistan has approved a tax-neutral bonded policy that allows Saudi companies to establish commercial oil reserves in the country without local tax liabilities, according to a Petroleum Division statement issued on Friday.
Petroleum Minister Ali Pervaiz Malik shared details of the offer during a meeting with Saudi Arabia's new ambassador to Pakistan, Dr Rajeh bin Tami Al-Baqami. The meeting discussed cooperation in mining, petroleum and energy, including oil storage, refinery upgradation and LPG supplies.
The policy is benchmarked against Fujairah and Singapore, according to ProPakistani. The official statement said the arrangement would help Saudi Arabia diversify maritime transit risks linked to the Strait of Hormuz and the Bab Al Mandeb Strait, and give it easier access to Asian markets. The minister said storage in Pakistan would give the kingdom more flexibility in managing supply routes.
Plans exist for a major petroleum storage and refining complex at Hub, Balochistan, able to handle Very Large Crude Carriers. The government had earlier announced plans for an oil city at Hub with a large storage complex.
The minister also invited Saudi investment in Pakistan's refinery upgradation programme, which aims to modernise local refineries and move to Euro 5 fuel standards.
He thanked Saudi authorities at Yanbu port for prioritising crude oil shipments to Pakistan during recent global market disruptions. He also discussed working with Saudi Aramco on more crude oil cargoes and dedicated LPG shipments ahead of higher winter gas demand.
The Saudi ambassador announced that the Saudi Embassy in Islamabad has introduced same-day visa processing for Pakistani citizens.
The minister invited Saudi Vice Minister of Mining Khalid al-Mudafier to the Pakistan Minerals Investment Forum in Islamabad on November 12 and 13. Minute Mirror reported that both sides agreed to expand energy and minerals cooperation.
Why it matters
Foreign-funded oil reserves could affect fuel supply and energy security in Pakistan. The talks also covered crude and LPG supplies ahead of higher winter gas demand.
