Wednesday, 12th August 2026
Khabor Wala Desk
Published: 12th March 2026, 11:03 AM
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.
| Trade Term | Risk Transfer Point | Seller Responsibilities | Buyer Responsibilities |
|---|---|---|---|
| CIF (Cost, Insurance, Freight) | At destination port once goods loaded | Freight and insurance costs to destination | Takes ownership at loading, pays import duties |
| FOB (Free on Board) | At port of shipment | Deliver goods on board vessel | Assumes ownership, risk, and freight costs |
| CFR (Cost and Freight) | At port of shipment | Freight costs to destination, no insurance | Risk transfers at shipment port, pays import duties |
| FAS (Free Alongside Ship) | At port of shipment | Deliver goods alongside vessel | Takes ownership and arranges freight/insurance |
| CPT (Carriage Paid To) | At agreed point of delivery | Freight to destination, no insurance | Risk transfers at shipment, handles insurance |
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.
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