In a development that is likely to take economic cooperation and people-to-people exchange to a new level, a high-level Pakistani delegation is likely to visit India next month to discuss building of pipelines from Panipat, Mathura and Bhatinda for transporting petroleum products and petrochemical by-products to Pakistan.
Late last year, India informed Pakistan that the Indian Oil Corporation (IOC) was ready to supply petroleum and petrochemical products regularly. To ensure their smooth flow, India proposed a pipeline network to Pakistan from various Indian refineries.
“IOC, which made a big participation in the India Show in Lahore, has offered to lay the pipelines. The proposal has evoked a good response from Pakistani traders and government, and they are working on the logistics. We hope to hear from them soon, and then a decision could be taken,” a senior Indian official said.
At that time, Pakistan had pointed out that its petroleum and petrochemical products were routed through the Karachi port before being distributed in various parts of the country, and it was an expensive exercise. It had also said the country had no policy for laying cross-border pipelines, and it needed to study the Indian proposal. The success of the petroleum story was evident from the fact that the IOC stall at the India Show was flooded with visitors and traders making enquiries, as IOC officials struggled to deal with the rush.
“We are ready to extend a helping hand to our neighbour. We are ready to export petrol, diesel and other petrochemical products. Now, the ball is in the Pakistan government's court,” said another official of the Indian delegation.
On January 25, Pakistan's Petroleum Minister Asim Hussain visited India and held talks with his counterpart Jaipal Reddy. “India is ready to offer petroleum products…to Pakistan, and even build a pipeline to carry the same, provided the neighbouring country gave a long-term off-take guarantee,” Mr. Reddy had said then.
Pakistan's refining capacity meets only half of the country's domestic requirement. India exports almost one-fourth of its 185-million tonne capacity. While Pakistan allowed diesel imports from India, it banned the import of petrol and other petroleum products.
“By allowing India to dock petrol and petroleum products, Pakistan's main advantage will be the savings in freight cost since several refineries in India are located close to the border,” Mian Naser Hyatt Maggo, a petrochemical dealer and IOC agent in Pakistan, said in Karachi.
Both countries have recently set up a joint working group on petroleum and petrochemical products to consider how to facilitate trade in the sector.
Keywords: Indo-Pak trade ties