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India-Pakistan oil deal halted due to price issue

India-Pakistan oil deal halted due to price issue
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Talks on petrol and diesel exports to Pakistan on Wednesday appeared to have hit the price bump with India expressing inability to offer big price discounts that the fuel-deficit neighbour is seeking.

During talks with oil minister S Jaipal Reddy, Pakistan’s petroleum and natural resources minister Asim Hussain wanted price formulations to be presented before his nation can decide on importing petrol, diesel or jet fuel [ATF].

State oil firms, who have refineries and oil depots near the border, can export fuel to Pakistan but they cannot be selling petrol or diesel at rates lower than what they charge domestic consumers.

He [Hussain] is insisting on pricing [of fuel]. We have not made any progress on the issue,  said an Indian official who attended the 45-minute long meeting Reddy had with Hussain on the sidelines of the Petrotech 2012 oil and gas conference.

Hindustan Petroleum Corp Ltd [HPCL] has a refinery at Bhatinda in Punjab while Indian Oil Corp [IOC] has a oil depot at Jalandhar, from where products can be moved into Pakistan.

‘We have stated that we want to look into price formulations before deciding, Hussain told reporters.

Pakistan imports 4-5 million tonnes of diesel from Kuwait every year. It has preferred the fellow Islamic nation over India as it gets a substantial discount as well as an extended credit period.

Indian officials insist that the PSUs are commercial enterprises which cannot sell products to Pakistan without a good profit.    
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