New tax-neutral bonded policy allows Saudi companies to maintain commercial oil reserves in Pakistan, while Islamabad seeks investment in storage, refineries and petroleum infrastructure.
Islamabad, October 30, 2026: Pakistan has offered Saudi Arabia tax-free commercial oil storage facilities under a newly approved tax-neutral bonded policy, aimed at attracting investment and positioning the country as a regional energy trading and storage hub.
Federal Minister for Petroleum Ali Pervaiz Malik shared the initiative during a meeting with Saudi Arabia’s newly appointed Ambassador to Pakistan, Dr Rajeh bin Tami Al-Baqami, in Islamabad on Friday.
The minister said Pakistan had approved a tax-neutral bonded policy benchmarked against international energy hubs such as Fujairah and Singapore. Under the framework, Saudi companies can establish commercial oil reserves in Pakistan without incurring local tax liabilities.
The initiative offers Saudi Arabia 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.
Malik said strategic petroleum storage facilities in Pakistan would provide Saudi Arabia with greater flexibility in managing oil supply routes and accessing regional consumers.
During the meeting, both sides discussed expanding bilateral cooperation in mining, petroleum and energy, including strategic oil storage, refinery modernisation, liquefied petroleum gas (LPG) supplies and commercial investment.
Pakistan plans major oil storage and refining complex
The petroleum minister highlighted plans to establish a major petroleum storage and refining complex at Hub, Balochistan, under the guidance of Technip Energies UK.
The proposed facility, backed by the prime minister and the Chief of Defence Forces, is expected to accommodate Very Large Crude Carriers (VLCCs), strengthening Pakistan’s potential as a regional energy corridor serving Central Asian and Chinese markets.
Malik also highlighted investment opportunities under Pakistan’s refinery upgradation programme, which aims to modernise existing refining infrastructure, improve operational efficiency and facilitate a transition towards Euro 5 fuel standards.
He said Saudi investors could play an important role in upgrading Pakistan’s domestic refining capacity.
Pakistan seeks more Saudi crude oil and LPG supplies
The minister appreciated Saudi Arabia’s support during recent disruptions in global energy markets and thanked Saudi authorities at Yanbu port for prioritising crude oil shipments to Pakistan.
He also discussed coordination with Saudi Aramco to explore increased procurement of crude oil cargoes and dedicated LPG shipments to meet Pakistan’s energy requirements, particularly ahead of higher domestic gas demand during winter.
Saudi Arabia announces same-day visa processing
Ambassador Al-Baqami reiterated Saudi Arabia’s commitment to strengthening bilateral relations, appreciating Pakistan’s longstanding support.
He also announced that the Saudi Embassy in Islamabad had introduced same-day processing of visa applications for Pakistani citizens to facilitate travel and promote business, cultural and people-to-people exchanges.
The minister also invited Saudi Arabia’s Vice Minister of Mining, Khalid Al-Mudaifer, to attend the Pakistan Minerals Investment Forum scheduled for November 12 and 13 in Islamabad.
Both sides reaffirmed their commitment to expanding investment and cooperation in petroleum, energy and minerals, building on the longstanding strategic partnership between Pakistan and Saudi Arabia.