Bonded Bulk Storage Policy will end fuel hoarding, reduce pressure on rupee: Musadik Malik

State Minister for Petroleum Musadik Malik announced on Wednesday that the Bonded Bulk Storage Policy 2023, recently approved by the Economic Coordination Committee (ECC) of the cabinet, will end the hoarding of petroleum products, reduce pressure on foreign exchange reserves and eliminate the fear of oil dry out in Pakistan.

In a press conference, he said this policy will stop the hoarding of oil because it will ensure an ample supply of fuel in the country, and “millions of tons of oil will be available in Pakistan at all times”.

In case of a delay in receipt of the foreign cargo by oil marketing companies (OMCs), the government will instruct them to arrange fuel from local sources under this policy, he stated.

He also stated that this policy will allow traders to choose whether they want to perform the transaction in rupees or dollars.

“Up till now, we could only buy oil in dollars but now this will no longer be the case. This policy will allow rupee transactions as well.”

The pressure on rupee and foreign exchange will fall, he said.

The Bonded Bulk Storage Policy ends the fear of petroleum dry out altogether, he underlined.

Second Russian oil shipment reaches Pakistan

The minister also announced that the second shipment of Russian oil has also reached Pakistan.

“The oil from first shipment is being processed in refineries and it has quashed rumours claiming that Russian oil was not suitable for local oil refineries,” he stressed.

Moreover, he cited that the government of Pakistan has inked an agreement with Azerbaijan for cheap gas supply in winter months.

“Azerbaijan will send one vessel of gas to Pakistan every month in the winter season and we have the right to reject it if we do not like the price,” he underlined. “We will buy it only if we feel that it is viable for the country else we will reject it.”

The minister announced that before leaving the government, he will present complete highlights of his performance as State Minister for Energy to the public of Pakistan.

“We will enhance affordability in energy sector and resolve daunting power issues in Pakistan,” he said.

Ishaq Dar’s announcement

Finance Minister Ishaq Dar announced earlier on Wednesday that ECC of the cabinet has approved the ‘Bonded Bulk Storage Policy 2023’ for petroleum products.

In a tweet, he stated that “another government’s commitment fulfilled with people of Pakistan that was made through Budget FY24 speech of June 9, 2023 in National Assembly of Pakistan”.

“State Minister for Petroleum will share detail through presser,” Dar added.

While unveiling budget 2023-24 on June 9, Dar had said that Pakistan would introduce a bonded bulk storage policy for crude oil and petroleum products by the end of June.

“Under the policy, foreign suppliers will be allowed to procure crude and POL products from the international market and store them in bonded bulk storages in Pakistan ports,” he stated.

Under the framework, if Pakistan needs to procure crude or finished oil products from foreign suppliers, the country’s customs department will de-bond the products.

“The policy will allow foreign suppliers to export the bonded products. If foreign suppliers use the country’s storage, they will pay for it,” he had said.