ISLAMABAD: Saudi companies will be able to hold commercial oil reserves in Pakistan free of local tax obligations under a bonded policy approved by the Pakistani government, officials said, as Islamabad courts foreign investment in its energy sector.
Federal Minister for Petroleum Ali Pervaiz Malik relayed the decision to Saudi Ambassador Dr. Rajeh bin Tami Al-Baqami during a meeting on bilateral cooperation in mining, petroleum and energy, according to a statement. Their discussions covered strategic oil storage, refinery modernization, LPG supplies and ways to facilitate commercial ties.
Malik said the policy was modeled on international energy hubs including Fujairah and Singapore. The arrangement, he said, would let Saudi firms build commercial reserves in Pakistan without incurring local tax liabilities, helping diversify maritime transit risks tied to the Strait of Hormuz and Bab al-Mandeb Strait while easing access to Asian markets.
Pakistan’s storage facilities would offer Riyadh more flexibility in managing supply routes and serving regional markets, the minister said. He also pointed to plans for a large petroleum storage and refining complex at Hub, Balochistan, developed with guidance from Technip Energies UK. The site would be capable of handling Very Large Crude Carriers and would support Pakistan’s ambitions to become a regional energy corridor for Central Asian and Chinese markets.
Malik highlighted investment prospects in Pakistan’s refinery upgrading program, which is intended to modernize infrastructure, boost efficiency and shift production toward Euro 5 fuel standards.
He expressed appreciation for Saudi support during recent global market disruptions, thanking officials at Yanbu port for giving priority to crude shipments bound for Pakistan. He said coordination with Saudi Aramco was exploring larger crude purchases and dedicated LPG shipments to meet Pakistani demand, especially with household gas use expected to rise over the winter.
The Saudi ambassador said his embassy in Islamabad has begun same-day visa processing for Pakistani citizens to encourage business, cultural and people-to-people exchanges.
Malik invited Saudi Vice Minister of Mining Khalid al-Mudafier to the Pakistan Minerals Investment Forum, set for Nov. 12-13 in Islamabad.
