Oil industry seeks extension of cost, insurance and freight-based import facility amid Middle East tensions

The Oil Companies Advisory Council (OCAC) has requested the State Bank of Pakistan (SBP) to extend the temporary permission for cost, insurance and freight (CIF)-based imports of petroleum products for an additional two months or until market conditions stabilise.

In a letter to Governor Jameel Ahmed, OCAC General Secretary Dr Syed Abbas Zaidi said the continuation of this facility would help ensure the timely procurement of cargo and maintain the uninterrupted availability of petroleum products in the country.

The SBP granted the relaxation last month for a period of 60 days in response to geopolitical tensions in the Middle East that disrupted shipping and insurance markets.

With the current permission set to expire on May 10, OCAC warned that discontinuing the facility at this stage could create challenges in maintaining stable supply chains for petroleum products.

OCAC said that despite the earlier relief, conditions in the region remain uncertain, with no significant improvement in shipping operations or insurance availability.

The council highlighted that challenges identified earlier, including limited availability and high cost of marine and war-risk insurance, continue to persist. It added that freight rates and war-risk premiums remain elevated, while suppliers and shipowners are still reluctant to operate under prevailing conditions.

According to the industry body, these factors have made imports under cost and freight (C&F) arrangements difficult to execute, increasing risks to supply continuity.