New Delhi : The thaw in relations between India and Pakistan, which started with cricket diplomacy in Chandigarh in March, could soon see India exporting petroleum products to its neighbour.
India, which has surplus refining capacity, has agreed to export fuels such as petrol and diesel to Pakistan to help the neighbouring country meet its fuel shortfall and provide a new market for large refineries of Reliance Industries , Essar Oil and a new unit in which LN Mittal group is a co-promoter, Indian officials said on Monday.
"Pakistan is too keen to import refined petroleum products from across the border to save cost. Indianside will firm up the proposal in an internal meeting before the bilateral meeting," said one of officials with direct knowledge of the matter.
India imports about three quarters of oil it consumes but its refining capacity has expanded rapidly making it a key player in the international market. Exports of refined products have risen to 51 million tonne in 2009-10 from 746,000 tonne in 1999-2000 according to government data.
Commerce secretaries of two nations will meet in Islamabad on April 27-28 to renew trade ties between two countries, which has been at a standstill since November 2008 after terrorist attack in Mumbai. Acrimonious relations between two neighbours eased at Mohali where Prime Minister Manmohan Singh and his Pakistani counterpart Yusuf Raza Gilani together watched the Indo-Pak cricket World Cup semi-finallast month.
Indian officials said increased trade inter-dependence would force the two nations to keep friendly relations. India was in a position to meet Pakistan's fuel demand. Pakistan has about 12-million-tonnerefining capacity, which meets only half of its annual requirements while India exports about 25% of its 185-million-tonne refining capacity. India's export of refined products is expected to jump further with expected addition of 30-million-tonne new capacities by March 2012 when Bathinda, Bina & Paradeep refineries are commissioned.
The nine-million-tonne Bathinda refinery near Indo-Pakistan border is expected to be commissioned thisyear. Co-promoted by LN Mittal group & Hindustan Petroleum Corp , the refinery has been eyeing Pakistan market for its products, officials in oil ministry said.
Arcelor Mittal group management board member Sudhir Maheshwari recently said Pakistan was "a natural export market" given the proximity to the refinery. Talks between India and Pakistan to start trade ofpetroleum products were initiated in 2005 by the then oil minister Mani Shankar Aiyar, who favoured diesel supply to the neighbour.
India had exported some petrochemicals such as purified terephthalic acid (PTA) and lube oil base stock (LOBS) to Pakistan through sea route. Later, former oil minister Murli Deora also proposed to export PTA from Indian Oil Corp's Panipat refinery to Pakistan through land route via Wagah border. But proposals remained on paper due to political tensions, especially after Mumbai attack. PPI
