Pakistan offers Saudi Arabia tax-free oil storage facilities

ISLAMABAD: Pakistan has offered Saudi Arabian companies the opportunity to establish commercial oil storage facilities in the country under a tax-neutral bonded storage policy, as Islamabad seeks to attract investment and strengthen bilateral cooperation in the petroleum and energy sectors.

The proposal was discussed during a meeting between Federal Petroleum Minister Ali Pervaiz Malik and Saudi Arabia’s newly appointed Ambassador to Pakistan, Dr Rajeh bin Sami Al-Baqami, on Friday.

According to details, the meeting focused on expanding cooperation and investment opportunities in minerals, petroleum and energy, with Pakistan presenting several proposals aimed at encouraging Saudi companies to invest in its energy infrastructure.

Under the proposed tax-neutral bonded storage policy, Saudi firms would be able to establish oil reserves in Pakistan on a commercial basis, potentially creating new opportunities for petroleum trading, storage and regional energy supply.

The initiative is aimed at making Pakistan an attractive destination for international energy companies by offering a framework that could facilitate the storage and management of petroleum products without imposing additional tax burdens under the proposed arrangements.

During the meeting, Pakistan also presented a proposal for establishing a major petroleum storage and refining complex in Hub, Balochistan.

The proposed project could strengthen the country’s petroleum infrastructure, expand its refining and storage capacity and create opportunities for foreign investment in the energy sector.

Saudi Arabia remains an important economic partner for Pakistan, with both countries seeking to deepen cooperation across strategic industries, including energy, minerals and petroleum.

The latest proposals reflect Islamabad’s efforts to translate longstanding bilateral relations into commercial partnerships and attract investment from Saudi companies.

For Pakistan, foreign investment in oil storage and refining could help improve energy infrastructure and strengthen its capacity to manage petroleum supplies.

However, details regarding the investment size, project timeline and implementation arrangements for the proposed facilities have not yet been announced.

The proposals now offer a potential new avenue for Saudi investment as Pakistan looks to expand its energy sector and develop its position as a regional petroleum storage and trading destination.