core sector communique

Indo-Pak Expert Group Takes Step Forward to Boost Trade in Petro Products Press Note

The First Meeting of the Experts’ Group on Trade in Petroleum & Petrochemical Products between India and Pakistan was held on 17-18 July, 2012 at New Delhi. Mr. Vivek Kumar, Joint Secretary (International Cooperation), Ministry of Petroleum & Natural Gas, led the Indian delegation comprising representatives of the Department of Commerce, Ministry of Chemicals and Fertilizers, Ministry of External Affairs, Railway Board besides Petrofed and the oil companies. Mr. Shabbir Ahmad, Joint Secretary (I&JV), Ministry of Petroleum & Natural Resources, led the delegation from Pakistan. The Pakistan side informed that Government of Pakistan’s Notification dated 30th March 2012 containing 1209 products does not contain major petroleum products, thus allowing their import into Pakistan. The Indian side welcomed the fact that Government of Pakistan has increased the items allowed for import through the land route from 110 to 137 and requested the Pakistan side to remove its present restrictions on trade by road route so that petroleum and petrochemical products can also move across the border. Both sides welcomed the inauguration of the Integrated Check Post (ICP) at Attari-Wagah border on 13.04.2012. However, it was noted that trade through the road route was limited to specified products. The Indian side suggested that solid products like Pet Coke and Sulphur could be moved in open trucks, finished lubes (small packs & drums) in containers, and liquid products like Hexane, MTO, Petrol, Furnace Oil, LAB, MEG, DEG, TEG, Lube Oil Base Stock be transported in ISO tank containers /tank trucks. It was noted that the use of Attari-Wagah railway line was currently limited to trade in petrochemical products only, mainly by Indian Oil Corporation Limited. Both sides agreed that the current prohibition on rail movement of container and open wagons for Pet Coke and Sulphur needs to be re-examined. The Indian side emphasized the desirability of developing another railway route for trade, i.e., the Munabao-Khokrapar route.  Both sides agreed on the need for the railway authorities of India and Pakistan to work out the most optimal commercial utilization of the available railway infrastructure for transportation of petroleum and petrochemical products, including addressing the existing issue of inadequacy of locomotives in Pakistan. HPCL /HMEL and IOCL respectively offered to examine the feasibility of constructing petroleum product pipelines between HMEL’s Bathinda refinery and Lahore, IOCL’s Jalandhar tap-off point to Lahore subject to commercial viability and considerations.   Noting that the current cost of confirmation of letters of credit was high, both sides agreed on the need to work out back-to-back credit lines between banks so as to put in place an efficient trade finance arrangement between the two countries.  It was agreed that this would be taken up with the respective Central Banks, Finance Ministries and other agencies concerned.  Both sides also noted the need for a direct courier service between India and Pakistan, as presently cargo reaches much faster than the documents required for clearing of goods at the discharge port. Both sides agreed to take up the matter with the appropriate authorities in their respective Governments. Both sides agreed on the need to make the SAFTA Certificate recognition systems online so as to prevent delays in the process and thereby facilitate timely availing of import duty benefits. It was recognized that in the current international scenario, trade in petroleum products between the two sides would have to be guided by the principles of commerciality and market considerations.  It was agreed that commercial matters such as matching Pakistan’s product specification requirements, pricing, other term and conditions of trade and participation in tenders floated by Pakistan’s oil companies would be left to the commercial entities of both sides. Ministry of Petroleum & Natural Gas Government of India, July 18, 2012