ISLAMABAD: The federal government’s decision to allow import of oil products on foreign suppliers’ account through customs bonded storage facilities, has not yet materialized due to delay in notification of Standard Operating Procedures (SOPs) by the Federal Board of Revenue (FBR).

The decision to allow import on foreign suppliers’ account through customs bonded storage facilities had been taken by Mian Shahbaz Sharif led government in June this year, with directions to FBR to make rules for this purpose.

According to Petroleum Division, in view of limited local refinery supplies, Pakistan is heavily dependent on import of deficit petroleum products. In order to enhance supply access to the local OMCs, diversify the sources of supply and to avail freight economies of scale, international oil suppliers would be facilitated/encouraged to make investments storage and trade of crude oil and petroleum products under the policy guidelines.

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As per the policy guidelines on this matter, foreign suppliers or their registered subsidiary will be allowed to maintain inventory or crude oil and petroleum products in bulk form, in their private bonded warehouses or customs public bonded warehouses located anywhere in Pakistan( without foreign exchange remittances), pending sale to local purchases or its re-export therefrom to other foreign countries.

The consignee shall have the option to develop their own dedicated storage infrastructure and utilize the customs public bonded warehouse facility on rent basis located around port premises or anywhere in Pakistan for storing crude oil and petroleum products, duly licensed by the OGRA, under the Pakistan Oil (Refining, Blending, Transportation, Storage and Marketing) Rules 2016.

The consignee’s Customs Bonded Warehouse shall be licenced by the Customs after fulfillment of requirements for operating as Public Bonded Warehouse for storage of crude oil and petroleum products under Section 12 & 13 of the Customs Act, 1969.

The Consignee shall be registered with the Inland Revenue, Federal Board of Revenue (FBR), under the Sales Tax Act, 1990, as an importer and exporter.

At the time of storing the goods, received under the scheme, the Consignee shall not be required to file Electronic Import Form (EIF) with his Goods Declaration (GD) for in-bonding (IB).

The Consignee shall then sell the goods to licensed purchasers (Refineries or OMCs) in US Dollars or Pak Rupees against opening of Letters of Credit through scheduled banks without requiring LC confirmation by international banks or advance payments, as per applicable foreign exchange regulations. Sale and purchase of goods between foreign supplier and Pakistani purchaser will be on purely commercial basis without any liability on the part of the Government of Pakistan.

For selling the bonded goods to the local purchasers, the Consignee shall file Electronic Import Form (EIF) with his Goods Declaration (GD) for Ex-bonding (EB), to clear the bonded goods for custody transfer to local purchasers for subsequent home consumption, on payment of all applicable duties and taxes by Consignee on behalf of purchasers. The FBR shall allow movement of duty paid products through pipeline or any other mode of transportation and facilitate local purchasers for input/output tax adjustments.

The crude oil and regulated petroleum products stored in the Bonded Warehouse shall only be sold/supplied to Oil Refineries and Oil Marketing Companies (OMCs) respectively, which possess valid license from OGRA and have prior permission of OGRA for each consignment.

For sale of petroleum products in the country from Bonded Storage, the pricing mechanism, as approved by the government/OGRA from time to time, shall be applicable.

No products, falling under negative list of import policy order in vogue, shall be supplied under this scheme. The Consignee would provide a certificate of origin of the product and an undertaking to the relevant regulators (FBR) that neither sanctioned product is imported into Pakistan nor any sanctioned entity has supplied such products.

Prior to export of crude oil and/or petroleum products, the Consignee will give 15 days’ advance notice to OGRA and oil industry.

In this context, Directorate General Oil of Petroleum Division through a letter of September 1, 2023 to the Managing Director (MD) of Printing Corporation of Pakistan Press, Karachi asked for publication in the gazette of Pakistan for general information regarding policy guidelines on import on foreign supplier’s account through customs bonded storage facilities.

The sources said, M/s Vitol Bahrain is contemplating to bring petroleum products to Pakistan but delay in notification of Standard Operating Procedures by (L&P) department of the FBR, the consignment has not landed.

The company, in a letter, requested the FBR to allow them to import part cargo from MT Nave Andromeda carrying Mogas 92 Ron under subject facility, to enable them to make necessary arrangements for it beforehand. The firm has enquired from FBR as to whether any separate SOP/Guidelines for regulating and monitoring imports and exports of POL products under this arrangement from FBR/Customs is in the pipeline or under consideration.

Copyright Business Recorder, 2023

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Cool boy Nov 13, 2023 12:26pm
Another way to send dollars abroad.... They better invest in local refineries instead
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