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Fuel exports to Pakistan hit bumpy road

Published: 18th October 2012 10:15 AM  |   Last Updated: 18th October 2012 10:15 AM   |  A+A-

India has expressed its inability to offer big discounts to Pakistan for diesel, petrol or aviation turbine fuel that it intends to import from India.

During talks with India’s Oil Minister Jaipal Reddy, Pakistani oil minister Asim Hussain wanted price formulations to be presented, before Pakistan could take a firm decision on importing petroleum products from India.

“He (Hussain) is insisting on pricing of fuel. We have not made any progress on the issue so far,” an Indian official, who attended the 45-minute long meeting that Reddy had with Hussain, said on the sidelines of the concluding day of  Petroleum and Gas seminar ‘Petrotech 2012’.

“State oil firms that have refineries and oil depots near the border  can export fuel to Pakistan but cannot sell petrol or diesel at rates lower than what they charge from domestic consumers,” the official further said.

“Hindustan Petroleum Corp Ltd (HPCL) has a refinery at Bhatinda in Punjab while Indian Oil Corp (IOC) has a oil depot at Jalandhar  from where products can be moved into Pakistan.

“We want to look into price formulations before deciding,” Hussain added.

Pakistan imports 4-5 million tonnes of diesel from Kuwait, every year. It has preferred the fellow Islamic nation over India as it gets a substantial discount and extended credit period to make payments.

India, however, maintains that the state-owned firms cannot sell products to Pakistan without a margin or at rates that are lower than domestic prices. Also Pakistan has not indicated what volumes it wants to import from India.

The other issue that remains to be worked out is of moving the petroleum products. Indian firms feel that exports would only be profitable only if it is moved by either rail or road.



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