ISLAMABAD: Pakistan has approved a tax-neutral bonded policy that will allow Saudi companies to establish commercial oil reserves in the country without local tax liabilities, part of a push to attract foreign investment.
The decision was announced during a meeting between Federal Minister for Petroleum Ali Pervaiz Malik and Saudi Arabia's new ambassador to Pakistan, Dr. Rajeh bin Tami Al-Baqami, to discuss cooperation in the mining, petroleum and energy sectors, according to a statement. The talks covered strategic oil storage, refinery upgrades, LPG supplies and facilitation of commercial engagement.
Malik told the envoy that the bonded policy is benchmarked against international energy hubs such as Fujairah and Singapore. Under the framework, Saudi companies can set up commercial oil reserves in Pakistan free of local tax obligations, offering an opportunity to diversify maritime transit risks associated with the Strait of Hormuz and the Bab al-Mandeb Strait while improving access to Asian markets, the statement said.
The minister said strategic storage facilities in Pakistan would give Saudi Arabia greater flexibility in managing supply routes and reaching regional markets. He also outlined plans to develop a major petroleum storage and refining complex at Hub in Balochistan under the guidance of Technip Energies UK. The proposed facility would accommodate Very Large Crude Carriers and bolster Pakistan's potential as a regional energy corridor serving Central Asian and Chinese markets, he said.
Malik cited investment opportunities in Pakistan's refinery upgrading program, which aims to modernize domestic refining infrastructure, improve efficiency and move toward Euro 5 fuel standards.
He thanked Saudi authorities at Yanbu port for prioritizing crude oil shipments to Pakistan during recent global market disruptions, and said coordination with Saudi Aramco was underway to explore expanded crude oil procurement and dedicated LPG shipments, particularly ahead of expected growth in domestic gas demand during winter.
Al-Baqami announced that the Saudi Embassy in Islamabad has introduced same-day visa processing for Pakistani citizens to facilitate travel and strengthen business, cultural and people-to-people exchanges.
Malik invited Saudi Vice Minister of Mining Khalid al-Mudafier to attend the Pakistan Minerals Investment Forum, scheduled for Nov. 12-13 in Islamabad.
