Pakistan Offers Saudi Arabia Tax-Free Oil Storage Facilities
Pakistan has approved a tax-neutral bonded storage policy to attract Saudi investment in oil reserves and refinery upgrades to establish a regional energy corridor.
The Government of Pakistan has approved a tax-neutral bonded storage policy allowing Saudi Arabian companies to establish commercial oil reserves without local tax liabilities. Federal Minister for Petroleum Ali Pervaiz Malik presented the framework to Saudi Ambassador Dr. Rajeh Tami Albugamy, noting the policy is benchmarked against international hubs such as Singapore and Fujairah. The arrangement aims to attract foreign investment while helping Saudi Arabia diversify maritime transit risks associated with the Strait of Hormuz and the Bab Al Mandeb Strait.
As part of a broader energy strategy, Pakistan is planning a petroleum storage and refining complex in Hub, Balochistan. This facility is designed to accommodate very large crude carriers and serve markets in Central Asia and China, positioning Pakistan as a regional energy corridor. Minister Malik also sought Saudi investment to upgrade refineries to Euro 5 standards and discussed increasing crude oil and LPG shipments from Saudi Aramco.
These energy initiatives follow a meeting on October 29 between Finance Minister Muhammad Aurangzeb and Ambassador Albugamy, where discussions focused on attracting Saudi investment in mining and agriculture to support investment-led growth. To further facilitate business and cultural ties, the Saudi Embassy in Islamabad has introduced same-day visa processing for Pakistani citizens.
