Commerce Secretary-level talks to start in Islamabad on April 27

In the run-up to the Commerce Secretary-level talks commencing in Islamabad on April 27, India on Monday expressed its willingness to export petrol and diesel to Pakistan provided the neighbouring country lifts ban on import of petroleum products from across the border.

“We have been pressing Pakistan since 2005 to remove petroleum products particularly diesel from the list of items it does not allow to be imported from India. The issue may again be discussed when Commerce Secretaries of the two nations meet in Islamabad later this week,” a senior official said here.

Former Petroleum and Natural Gas Minister Mani Shankar Aiyer had in June 2005 raised the issue of India exporting diesel to Pakistan during his visit to Islamabad. Pakistan at that time promised to look into the demand but nothing has moved since then on this front.

Pakistan imports 4-5 million tonnes of diesel from Kuwait every year. It was the Indian Oil Corporation (IOC) which had offered in 2005 to sell 3.25 lakh tonnes of diesel to Pakistan during the six months beginning October 2005 at a discount. At that time, Pakistan had sought price quotations from IOC for import of diesel at Lahore and Karachi. IOC had proposed to supply one lakh tonnes of diesel from Jamnagar to Karachi through the sea route and the remaining 2.25 lakh tonnes through the land route.

IOC had proposed to price the product in such a way that the landed cost at Lahore was at least 50 cents a barrel less than the landed cost of fuel from Kuwait. But Pakistan did not take IOC's offer and continued with importing fuel from Kuwait.

“If the restriction goes, we are ready to supply diesel as well as petrol to Pakistan. It is an opportunity and a market for us,” IOC Director (Refineries) B. N. Bankapur told reporters here.

Besides IOC, private sector Reliance Industries Limited and Essar Oil too may look at selling fuel to Pakistan if the ban is lifted. RIL and Essar have refineries on the Gujarat coast, just hours away from Karachi.

IOC also hinted at making a foray into merchant power business while consolidating its leadership position in fuel retailing and oil refining business.

IOC Chairman R. S. Butola told journalists that IOC was looking at entering into merchant power business. “We have synergy as well as feedstock for that,” he said. The company has 1,100-1,200 MW of captive power generation capacity, with most of the refineries having surplus power to trade outside.

Digboi refinery in Assam has 5 MW of surplus power for which an agreement has been signed to give it to the Assam grid.

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