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India-Pak: Slow progress in trade talks for petroleum, power

India-Pak: Slow progress in trade talks for petroleum, power

New Delhi: Plans of India exporting petrol and power to Pakistan are making a "slow" progress as Islamabad continues to be wary of being dependent on its neighbour for meeting energy needs, impacting full normalisation of bilateral trade.

"We are going very slow in these areas (petrol and power). Joint working groups are meeting but the progress is very slow," a senior official said.

The official said that "the ball is now in the court of Islamabad", as New Delhi has agreed for all "possible" help to supply oil directly to Lahore.

In a joint statement in April, Commerce Ministers of Pakistan and India had expressed desire that concerned officials of both the countries should fast track the ongoing process.

During official level talks in July, India had asked Pakistan to allow shipment of petrol and diesel through the land route and also proposed building a dedicated pipeline to Lahore for ferrying oil products.

According to the official, Pakistan is also doubtful of importing oil from India as it is a strategic sector.

"They are hesitant on the issue of over-reliance on India for oil... They have to calculate how much they want to import. We have also suggested that India can build a pipeline and deliver oil directly to Lahore. Prices are also one of the major issues for Pakistan," the official said, adding Pakistan can save huge transportation cost.

"They are spending huge amount on importing oil from other places. India will give an alternate source for them. As per reports, Pakistan can save up to USD 100 million by importing oil from India," the official said.

Meanwhile, state-run Power Grid said India and Pakistan are in discussions for setting up an electricity transmission line to carry 500 MW power between Amristar and Lahore.

"... 500 MW Amritsar (India) -Lahore (Pakistan) HVDC link between India and Pakistan is under discussion," Power Grid said in its 2011-12 annual report.

The discussions are part of efforts to create a strong electricity grid between India and other SAARC countries such as Sri Lanka and Bangladesh, according to state-run Power Grid Corporation (PGCIL).

The feasibility study for an under-sea interconnection between India and Sri Lanka is under finalisation, the report added.

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 the 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, the official said.

HPCL and IOC have offered to build pipelines to Lahore from Bhatinda or Jalandhar.

Also, New Delhi has suggested allowing solid products like pet coke, sulphur and chemicals to be trucked via Attari-Wagah border, instead of Pakistan currently allowing imports 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.

The same is the matter with trade in power, although India has identified that electricity can be supplied through Amritsar-Lahore grid.

Earlier this month, an Indian delegation, including Power Ministry representatives, visited Pakistan and both sides have agreed to carry out feasibility studies on the proposal of importing power from India.

"The grid was identified by Power Grid Corporation of India. India can export 500 MW... According to reports, world bank has offered Pakistan to carry out a feasibility report on this grid link," the official said.

According to experts, change of Pakistan's commerce minister and secretary was also one of the reasons for slow progress in talks.

Bilateral trade between the countries stood at USD 2.7 billion.

Joint Working Groups that includes government officials of both the countries were set up to discuss technical issues in areas like petroleum, power and banking.


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