Editorial

Petroleum preferences

The proposal by the petroleum ministry makes a great deal of sense and could benefit both countries.

Editorial April 27, 2011

As talks get underway between the commerce secretaries of Pakistan and India in Islamabad, the petroleum ministry has made a suggestion that would not only render the talks truly useful but also benefit many people in the country. The ministry has proposed that petroleum products be imported from India and cement and chemicals exported to it. A ‘most-favoured nation’ status for India has been proposed to facilitate this exchange. Previously, Pakistan’s commerce secretary, Zafar Mehmood, ahead of the arrival in the country of his Indian counterpart Rahul Khullar, had also mentioned an Indian offer to sell to Pakistan the power it urgently needs. This matter, too, is likely to come up during the two-day discussions.

The proposal by the petroleum ministry makes a great deal of sense and could benefit both countries. Indeed, the ministry believes Pakistan could meet its total diesel need of 4.4 million tons by bringing it across by road from India. Significantly, diesel currently costs Rs92.90 in Pakistan and Rs75.56 in India. Petrol prices are also significantly lower. The advantages of this to the people of our country are quite obvious. Indeed, it is nothing less than a tragedy that while diesel and furnace oil are on the list of items that can be imported from India, this has not happened due to political factors. The physical proximity of both countries, of course, makes it easy — and cheap — to bring across items by road or ship.

The provision by the ministry that India facilitate the export of cement and chemicals from Pakistan in exchange seems fair. There is much to be gained by developing trade ties. Concrete evidence of gains could also help change mindsets and as such lessen the influence of the hawks who hold back the building of closer relations. The petroleum ministry proposal lays down the advantages in just one area. There are certainly many more in other spheres. For the sake of the people of both countries these, too, need to be identified and ways found to take advantage of them by building better trade links.

Published in The Express Tribune, April 28^th, 2011.

COMMENTS (11)

R S JOHAR | 13 years ago | Reply Diesel price in India ranges between Rs37 to 42 per litre depending on taxes imposed in different states. However these are not actual rates but the subsidised rates and extra cost is borne by the govt.

Raqib Ali | 13 years ago | Reply Sometimes I feel that India and Pakistan need a one massive Tsunami before they come to senses!!!

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Ravi | 13 years ago | Reply @Amol: Well i still stand on my statement........... coz pakistani govt doesnot have control of jihadis. Any step forward will only provoke these elements in pakistan to carry out a terror attack in india...

Suresh | 13 years ago | Reply Refining crude oil needs electrical energy, and additional refining of Pakistani petroleum necessitate additional energy for India. Energy deficient India could anyway create much higher value addition if it had access to this extra energy. Hence, this deal does not really make economic sense to India, but would only add to trade volume and Reliance's profit. Cotton too is a scarce and deficit commodity and should not be exported except for some short term emergency.

joy | 13 years ago | Reply get a life all you people................let them agree on something first..then you may comment... pls bear in mind this is not two ordinary neighbours talking..these are India and Pakistan...need i say more?

Cherish Raj | 13 years ago | Reply @Arijit Sharma: Making payments in foreign currency is the norm in foreign trade. Btw, there is $2 billion trade between India and Pakistan as of now

aman | 13 years ago | Reply @uH Petrol prices may be cheaper in paksitan calculating with converted currency is due to multiple taxes (central tax+state tax+VAT)in india! In case of trading,these taxes wont be accrued !!

Arijit Sharma | 13 years ago | Reply India has excess refining capacity does not mean India has excessive crude petroleum - India's import bill will go up and so Pakistan must make payments in acceptable foreign currency or export to India things India would normally buy in the international market using foreign currency.

Amol | 13 years ago | Reply This is with reference to the comments of Ravi: One must not be so fanatical in one's response! A good relationship between two neighbors, in spite of all the real and perceived injustices done in the past, is a thing for which all right-minded citizens of India and Pakistan should strive for. After all if Indians have some grievances, Pakistanis have no less. It is a matter of perspectives. A step in the direction of peace however wobbly or slow must be taken with emboldened vigor for the benefit of the subcontinent and this courage will go down in the history as a right step in the right direction.

uH | 13 years ago | Reply To the best of my knowledge, the statement 'Petrol prices are also significantly lower' is incorrect. Petrol price in Pakistan is approximately 30% less than that in India (in terms $/litre). Besides, at the current price Indian OMCs incur a loss of approx. Rs. 16 per litre on diesel, so the (implied) notion that Pak will be able to import diesel @ Rs. 75 is also potentially misleading. It would augur well for the Express Tribune to get their facts right and stop misleading their readers.

Ravi | 13 years ago | Reply P.S: And india and indians should be ready for another brazen attack by pakistani based Non State Actors.......... (This should have been added in the editorial)

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