Pakistan permits oil imports on CIF basis for 60 days amid geopolitical challenges

ISLAMABAD: In response to ongoing geopolitical challenges affecting petroleum imports, Pakistan has granted permission for the import of crude oil and all petroleum products on a cost, insurance, and freight (CIF) basis for a period of 60 days. The decision, which takes effect from March 11, was announced on Wednesday through a formal circular issued by the State Bank of Pakistan (SBP).

The SBP stated, “In view of the prevailing situation and the critical importance of crude oil and petroleum products for the country, it has been decided to allow import of crude oil/petroleum products on CIF (cost, insurance and freight) basis for a period of 60 days starting March 11.”

The circular was addressed to the presidents and chief executive officers of all authorised foreign exchange dealers. It directed these institutions to immediately inform all dealers and their clients to ensure strict compliance with the new guidelines.

The move follows requests from the local oil industry, which had earlier in the week sought special permission to import oil, including crude, with advance war-risk insurance due to the current international situation. The SBP’s decision is intended to facilitate the continued import of essential petroleum products despite heightened risks and disruptions in global supply chains.

According to the SBP, the temporary measure aims to ensure the uninterrupted supply of crude oil and petroleum products, which are vital for the country’s energy needs. The advance war-risk insurance requirement is designed to mitigate potential risks associated with the transportation of oil amid the ongoing geopolitical uncertainties.

The SBP’s directive underscores the government’s recognition of the critical role of energy imports in maintaining economic stability and meeting domestic demand. All authorised dealers have been instructed to adhere strictly to the new import procedures throughout the 60-day period.