By Staff Reporter
ISLAMABAD: Pakistan will let foreign oil suppliers store crude and refined products in bonded facilities at its ports, a move that may ease the nation’s foreign exchange burden and prevent fuel shortages, the state minister for petroleum said on Wednesday.
The new policy will also eliminate the fear of oil dry out, Minister Musadik Malik said.
Malik told a press conference that the Bonded Bulk Storage Policy 2023, approved by the cabinet’s Economic Coordination Committee (ECC) a day earlier, would ensure an ample supply of fuel in the country and prevent shortages caused by delays in cargo arrivals.
“Millions of tons of oil will be available in Pakistan at all times,” he said, adding that the government would instruct oil marketing companies (OMCs) to arrange fuel from local sources if their foreign shipments were late.
He also said the policy would give traders the option to perform transactions in rupees or dollars, easing the pressure on the local currency and foreign exchange reserves.
“Up till now, we could only buy oil in dollars but now this will no longer be the case. This policy will allow rupee transactions as well.”
The policy ends the fear of petroleum dry out altogether, Malik said.
The minister also announced that the second shipment of Russian oil had reached Pakistan and was being processed in refineries, dismissing rumours that it was not suitable for local use.
He said Pakistan had signed an agreement with Azerbaijan for cheap gas supply in winter months, with the option to reject it if the price was not favourable.
“We will buy it only if we feel that it is viable for the country else we will reject it,” he said. “We will enhance affordability in energy sector and resolve daunting power issues in Pakistan.”
Finance Minister Ishaq Dar tweeted earlier that the ECC had approved the new oil storage policy, fulfilling a commitment made in his budget speech on June 9.
Under the policy, foreign suppliers can procure crude and POL products from the international market and store them in bonded bulk storages in Pakistan ports.
The customs department will de-bond the products if Pakistan needs to procure them from foreign suppliers, who can also export the bonded products and pay for using the country’s storage facilities.
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