SBP Permits Crude Oil Imports on CIF Basis

The State Bank of Pakistan (SBP) has announced a temporary relaxation allowing crude oil and petroleum products to be imported on a Cost, Insurance and Freight (CIF) basis for a period of 60 days. The move is aimed at ensuring uninterrupted energy supplies amid ongoing volatility in global oil markets.

In a circular issued to authorised dealers, the SBP emphasised that the measure is a response to fluctuations in international oil prices and the critical importance of petroleum for Pakistan’s energy security. Under normal circumstances, the central bank’s Foreign Exchange Manual permits imports under terms such as Free on Board (FOB), Free Carrier (FCA), Free Alongside Ship (FAS), Cost and Freight (CFR), and Carriage Paid To (CPT).

The temporary CIF allowance is intended to give importers greater flexibility, enabling them to secure shipments more efficiently during periods of market uncertainty. According to industry participants, this adjustment could help avoid supply disruptions and mitigate the risks posed by rapid price movements in global oil markets.

Under CIF terms, the seller is responsible for covering shipping and insurance costs up to the buyer’s designated port. The risk, however, transfers to the buyer once the cargo is loaded on the vessel. This differs from FOB arrangements, where the buyer assumes ownership and risk at the port of shipment, making importers potentially more vulnerable to logistical or price-related uncertainties.

The SBP circular specifies that the CIF import permission will remain valid for 60 days from the date of issuance, and authorised dealers are required to notify their clients of the revised arrangement and ensure strict compliance with the guidelines.

Comparative Overview of Key Trade Terms

Analysts say the SBP’s decision reflects a proactive approach to managing energy security risks and supporting importers during a turbulent period in the global oil market. With crude oil prices remaining volatile, this temporary flexibility is expected to stabilise supply chains and provide importers with more reliable sourcing options.