Minister of State for Petroleum, Dr Musadik Malik, announced the initiation of a ‘Bonded Storage Policy’ at a recent press conference.
The new policy allows foreign firms in the legal oil business globally to establish bonded warehouses in key cities across Pakistan.
Creating such warehouses will not only bring in foreign exchange reserves but also ensure the constant availability of petrol and diesel.
The measure is expected to break the monopoly of select oil marketing companies, often accused of creating artificial oil shortages, and deter unlawful hoarding practices.
Bonded Storage to Boost Foreign Investment
Malik elaborated that foreign entities storing petroleum in these bonded warehouses would be required to register in Pakistan and open local business accounts. This process would consequently address the issue of confirming Letters of Credit (LCs), as companies could directly transact in dollars or Pakistani Rupees through banks.
The Minister posited that this would reduce pressure on foreign exchange reserves, giving the government more flexibility for various payments and eliminating LC charges previously passed onto consumers. Small filling stations, which often suffer during oil shortages, would also benefit as they could purchase oil from these warehouses.
Highlighting other government efforts, Malik mentioned the recent inexpensive gas deal with Azerbaijan and the Prime Minister’s launch of four solar energy projects totalling 10,000 MW capacity. The government is also developing a comprehensive plan to push major Pakistani petroleum companies towards renewable energy, green hydrogen, and green ammonia.
