Karachi, April 15, 2024 – The Federal Board of Revenue (FBR) has taken significant steps towards streamlining the operations of international oil suppliers in Pakistan by implementing rules under the Customs Bonded Facilities Rules, 2024.
The move aims to regulate and facilitate the import, storage, and re-export of petroleum products, thereby enhancing transparency and efficiency in the oil supply chain.
The FBR’s initiative, outlined in SRO 568(I)/2024 dated April 2, 2024, signifies a pivotal milestone in the governance of international oil trade within the country. Under the newly implemented rules, foreign oil suppliers have the option to establish their own registered business entities or operate through subsidiary companies registered in Pakistan.
Key provisions of the rules include:
1. Establishment of Customs Bonded Facilities: International oil suppliers are permitted to maintain an inventory of crude oil and other petroleum products in bulk within customs bonded warehouses located across Pakistan. This allows for the storage of imported petroleum products without the requirement of immediate foreign exchange remittances, pending their sale to local purchasers or re-export to foreign countries.
2. Payment of Charges in Foreign Currency: Foreign suppliers or their subsidiaries opting to store imported petroleum products in customs public bonded warehouses are required to pay warehouse rent, port dues, and other service charges in foreign currency (US Dollars) through banking channels. Compliance with instructions issued by the State Bank of Pakistan or Customs in this regard is mandatory.
3. Customs Clearance Procedure: The rules outline detailed procedures for customs clearance, including the filing of goods declarations (GD) by consignees or their authorized customs agents upon the arrival of petroleum products at ports. Samples of imported petroleum products are to be drawn and referred to the Hydrocarbon Development Institute of Pakistan (HDIP) for testing and analysis to confirm specifications. Subsequent assessments and examinations are to be conducted by customs officers in accordance with established procedures.
4. Domestic Sale and Re-export: Consignees are permitted to sell bonded petroleum products to local purchasers, subject to prior online permission from the Oil and Gas Regulatory Authority (OGRA) and compliance with import policy conditions. Re-export of warehoused petroleum products is allowed under specified conditions, with consignees required to inform OGRA and the Oil Companies Advisory Council (OCAC) fifteen days in advance.
5. Monitoring and Verification: OGRA is provided with online visibility of bonded petroleum products stored by consignees and oil marketing companies (OMCs) through the customs computerized system (WeBOC). Samples are drawn for analysis to ensure conformity with declared specifications before re-export.
The implementation of these rules marks a significant milestone in the regulation of international oil trade in Pakistan, aiming to enhance transparency, efficiency, and compliance within the sector. By providing a structured framework for the import, storage, and re-export of petroleum products, the FBR aims to facilitate smooth operations and promote investment in the country’s energy sector.
