A Pakistani policeman stands guard in front of a petrol station in Lahore on April 26, 2011. India plans to export petrol and diesel to Pakistan to help its neighbour meet its energy needs and to open up a new market for Indian refiners such as giant Reliance Industries, a report said.
ISLAMABAD: The petroleum ministry has proposed that the ‘most favoured nation’ (MFN) status be granted to India to facilitate import of petroleum products and export of cement and chemicals which would be a cost-effective proposition for both countries.
A commerce ministry official said a summary prepared by the petroleum ministry on the matter would become the basis of the two-day talks between the commerce secretaries of the two countries beginning here on Wednesday.
According to sources, the oil imports would be conditional to India facilitating export of Pakistani cement and chemicals without any barriers.
The official said the ministry had proposed the MFN status for India about two years ago and it reiterated its position this week as part of preparations for the talks.
According to the petroleum ministry, the country’s consumption of petroleum products currently stood at about 21 million tons, of which about 85 per cent was met through imports. Indigenous crude production meets only 15 per cent of the consumption, while 30 per cent crude and 55 per cent refined products are imported. The country’s total refining capacity is about 13 million tons.
The transportation of about two million tons of POL products takes place through the railway, 4.5 million tons through pipelines and about 14.5 million tons by road.
The ministry believes that Pakistan’s total diesel consumption of about 4.4 million tons can be met through imports from India where its prices are lower than in Pakistan. The price of diesel in Pakistan is Rs92.90 per litre against Rs75.56 in India (40 Indian rupees). The price of petrol in India is equivalent to Rs61.50 per litre and Rs83.55 in Pakistan.
According to the ministry, Bhatinda and Panipat have a refining capacity of about 15 million tons and two refineries of the Reliance Industries have a capacity of 40 million tons.
It has proposed that import be allowed through Wagah border by rail and road to meet diesel requirements in northern parts of the country and through sea for Karachi and adjoining areas.
The official said that since furnace oil and high speed diesel were deregulated items in Pakistan, oil marketing companies should be allowed to import the two products through open bidding.
Both diesel and furnace oil are on the positive list of importable items from India but imports do not take place because of political reasons.
The petroleum ministry has also proposed to put petrol and jet fuel, which are deficit products in Pakistan, on the positive list.
To achieve this objective, Indian companies may be allowed to participate in tenders floated by oil marketing companies.