Govt to permit re-export of oil by foreign suppliers

Move aims to streamline trade processes, involves amendments to Customs Rules, 2001


Irshad Ansari February 09, 2024

ISLAMABAD:

The federal government has announced plans to permit the import, local sale, and re-export of petroleum products facilitated by foreign suppliers. This decision, aimed at streamlining trade processes, involves amendments to the Customs Rules, 2001, introducing the Customs Bonded Facilitation Rules, 2024.

The Federal Board of Revenue (FBR) has initiated amendments to the Customs Rules, 2001, incorporating the Customs Bonded Facilitation Rules, 2024, according to documents available to The Express Tribune. Stakeholders are currently being consulted, with a 15-day window provided for opinions, suggestions, and objections. Any submissions beyond this timeframe will not be considered, with the amended rules slated for enforcement through a gazette notification.

Under the proposed amendments, a new chapter, Chapter XLV, will be added to the Customs Rules, 2001, specifically catering to international oil suppliers. These rules will enable the import of petroleum products on behalf of foreign suppliers, their subsequent sale in the domestic market, and re-exportation to other countries, aligning with government policy directives.

For this, foreign oil suppliers will have the option to establish their own registered businesses in Pakistan or operate through registered subsidiaries. Additionally, they may opt to import petroleum products through their subsidiaries, supplying domestically and re-exporting from Pakistan. The proposed rules also outline provisions for international suppliers to maintain inventory in customs bonded warehouses across Pakistan, facilitating local sales or re-exports without formal exchange.

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Should international oil suppliers choose to operate through a subsidiary registered in Pakistan, adherence to FBR registration and the possession of a Pakistani bank account are mandatory. Furthermore, obtaining a storage license from the Oil and Gas Regulatory Authority (OGRA) is required for those wishing to establish independent storage facilities in Pakistan.

To ensure compliance and security, the proposed amendments necessitate the provision of post-dated checks as security bonds for the import, local sale, and re-exportation of petroleum products. Assessing officers will oversee the fulfilment of these obligations.

Published in The Express Tribune, February 9th, 2024.

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