NEW DELHI, July 18:
India today asked Pakistan to allow shipment of petrol and diesel through the land route and proposed building a dedicated pipelines to Lahore for ferrying oil products.
Fuel-deficit Pakistan had in March this year removed gasoline or petrol from the list of banned imports from India. It, however, allowed petrol imports only through sea routes like in diesel.
Since 2009, when diesel imports from India were permitted, Indian oil firms have found it difficult to match the rate Pakistan gets from its ally Kuwait for sea shipments.
But if land route is opened, trucking diesel and petrol from the recently commissioned Bhatinda refinery of HPCL-Mittal Energy Ltd or from Jalandhar depot of Indian Oil Corp (IOC) would be very cost effective, an official said.
He said this after the first meeting of Experts Group on Trade in Petroleum and Petrochemical Products of the two countries here.
The official said HPCL/HMEL and IOC offered to build pipelines to Lahore from Bhatinda or Jalandhar.
Also, New Delhi suggested allowing solid products like pet coke, sulphur and chemicals to be trucked via Attari-Wagah border instead of Pakistan currently allowing its import only through rail.
Trucking operations give a far greater flexibility and cost effective option for moving oil products from HMEL’s Bhatinda or IOC’s Panipat refineries, the official said.
Islamabad, which was represented by Shabbir Ahmad, Joint Secretary in Ministry of Petroleum & Natural Resources, did not give any assurance on opening land route for petrol and diesel imports but was positive on allowing products like pet coke and sulphur on trucks.
The official said Pakistan imports about 4 million tonnes of diesel per annum, out of which 75 per cent was purchased on a long-term supply contract with Kuwait. The rest is sourced through open competitive biddings and Islamabad has asked India to participate in it.
It also imports about 6 million tonnes of furnace oil, out of which 1 million tonnes is being met through long-term supply contract. The remaining is sourced through open competitive biddings.
The official said the Indian side expressed constraints in meeting furnace oil quality and sought relaxation from Islamabad.
At present, Pakistan’s gasoline import requirement is about 1.5 million tonnes per year, which is being arranged through spot tenders.
Islamabad said this requirement will substantially reduce after commissioning of Byco refinery and setting up of isomerisation plants by the existing refineries.
The official said the Indian side stated that its domestic refiners with vast exportable surplus capacity had the flexibility to meet the requirements of Pakistan.
The surplus capacity of Euro-III and Euro-IV petroleum products is to the extent of 65 million tonnes, which would increase to 124 million tonnes by the end of 2016-17.
India has a refining capacity of 213 million tonnes per annum, while their domestic requirement is 148 million tonnes.
It plans to further expand refining capacity to 310 million tonnes per annum by the end of March, 2017, when the consumption is expected to be 186 million tonnes with an increased exportable surplus of 124 million tonnes.
Meanwhile, an official statement issued here said use of Attari-Wagah railway line was currently limited to trade in petrochemical products only, mainly by IOC.
“Both sides agreed that the current prohibition on rail movement of container and open wagons for pet coke and sulphur needs to be re-examined,” it said adding the Indian side emphasised the desirability of developing another railway route for trade—the Munabao-Khokrapar route.
Both sides agreed on the need for the railway authorities of India and Pakistan to work out the most optimal commercial utilisation of the available railway infrastructure.
This was with regard to transportation of petroleum and petrochemical products, including addressing the existing issue of inadequacy of locomotives in Pakistan.
It said HPCL /HMEL offered to examine the feasibility of constructing petroleum product pipelines between HMEL’s Bathinda refinery and Lahore.
The IOC offered to look at Jalandhar tap-off point to Lahore subject to commercial viability and considerations, the statement said.
Both sides agreed on the need to work out back-to-back credit lines between banks so as to put in place an efficient trade finance arrangement between the two countries.
It was agreed that this would be taken up with the respective Central Banks, Finance Ministries and other agencies concerned, it said.
Also, the two sides noted the need for a direct courier service between India and Pakistan, as presently cargo reaches much faster than the documents required for clearing of goods at the discharge port.
Both sides agreed to take up the matter with the appropriate authorities in their respective Governments.
“It was recognised that in the current international scenario, trade in petroleum products between the two sides would have to be guided by the principles of commerciality and market considerations.
“It was agreed that commercial matters such as matching Pakistan’s product specification requirements, pricing and other term and conditions of trade and participation in tenders floated by Pakistan’s oil companies would be left to the commercial entities of both sides,” the statement added.
Vivek Kumar, Joint Secretary (International Cooperation), Ministry of Petroleum & Natural Gas, led the Indian delegation that comprised representatives of the Department of Commerce, Ministry of Chemicals and Fertilisers, Ministry of External Affairs, Railway Board besides oil companies.
Shabbir Ahmad, Joint Secretary (I&JV), Ministry of Petroleum & Natural Resources, led the delegation from Pakistan.
The Pakistan side informed that Government of Pakistan’s Notification dated March 30, 2012 containing 1209 products does not contain major petroleum products, and now being allowed for import into Pakistan.
The Indian side welcomed the fact that Pakistan has increased the items allowed for import through the land route from 110 to 137 and requested the Pakistan side to remove its present restrictions on trade by road route so that petroleum and petrochemical products can also move across the border.
Both sides welcomed the inauguration of the Integrated Check Post (ICP) at Attari-Wagah border on April 13.
A Pakistani High Commission statement said: “The Experts had a useful exchange of views on aspects of trade in petroleum products in a cordial atmosphere”.
“The Experts agreed to continue consultations. The date for the next meeting will be fixed later,” it added. (PTI)
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