Dhaka to get Indian oil but Pak still hesitant

On February 10, IOC offered to export diesel upto Lahore through rail wagons from its Jalandhar depot. Lahore’s annual demand is about three million tonnes, which is met from Karachi either through imports or from refineries in Karachi.

‘‘Logistically it would be feasible to supply diesel by tank wagons, in full rake mode from our Jalandhar terminal. A single rake of 75 wagons can carry approximately 1,500 tonnes of diesel. The product will reach the actual consumption centre Lahore directly, from where it can be distributed,’’ said the IOC letter to Pakistan’s Petroleum Secretary M. Abdullah Yusuf.

However, if rail movement was not found feasible, IOC was willing to ship it to Karachi. ‘‘Alternatively, IOC can also supply products by ship for delivering at any ‘safe port’ in Pakistan. This will also result in other tangible and intangible benefits to Pakistan like lower inventory-carrying cost, better supply sourcing, reduced requirement of working capital etc,’’ it added.

However, it pointed out that Pakistan would have to first include refined petroleum products, including diesel, in the ‘‘positive list of importable items from India’’. IOC put in the formal proposal to Yusuf after he expressed the possibility of product imports to his Indian counterpart B K Chaturvedi during his January visit to India.

Islamabad, which has banned import of petroleum products from India, agreed to purchase diesel, offer oil and gas blocks and award CNG projects if New Delhi reviewed its refusal to a natural gas pipeline crossing through Pakistan. India is keen to import piped gas but the Ministry of External Affairs is yet to be convinced of the safety of the proposed pipeline.

IOC, which retails transport fuels in Sri Lanka, recently secured a contract to supply 220,000 tonnes of diesel and 20,000 tonnes of jet fuel to Bangladesh on a long-term basis. An IOC team will leave for Dhaka tomorrow to sign the deal. The contract, running until December, would see export of 10 gas oil cargoes at Chittagong.

The products would be supplied from the Chennai Petroleum Corp refinery.

Sources said talks were also on with Maldives for a term contract to supply petroleum products. The attempt is to secure its annual demand of 250,000 tonnes, they said.