Tuesday, November 15, 2022
ISLAMABAD: Pakistan will write to the United Arab Emirates this week in a bid to initiate a process to sign an inter-governmental agreement (IGA), seeking a government-to-government deal to import 1.5 million tonnes of petrol per annum, The News reported Tuesday.
Under a five to eight-year deal, Pakistan will import 1.5 million tonnes of Motor Spirit (Mogas) which makes it 30 cargoes in one year. The country would import two and a half to three cargoes a month from the gulf country.
“We have already signed the IGA template with Oman, Qatar, the Kingdom of Saudi Arabia and some other countries and the same will be sent to the UAE for authorities to examine it and sign it. Once the IGA is signed, both countries would start negotiating the GtG deal for the import of Mogas (petrol), crude oil and Jet fuel,” a senior official of the Energy Ministry told The News.
During the Abu Dhabi talks held in the first week of the current month, top officials from both sides had agreed to enter a GtG deal for the import of petrol, crude oil and Jet fuel.
“This would help Pakistan have sustainable availability of petroleum products in the country. More importantly, the GtG deal would also provide a monetary solace in terms of premiums in importing petrol and other products.”
Once the IGA is finalised and inked, on behalf of Pakistan, the public state-owned company, Pakistan State Oil (PSO) and on behalf of the UAE, ADNOC (Abu Dhabi National Oil Company) will initiate talks for a commercial agreement on a GtG basis.
Pakistan wants both IGA and business deals to be inked before December 31, 2022, so that from January 2023, the import of petroleum on a GtG basis could start from the UAE.
The official explained that after the IGA was inked, both sides would initiate talks on the structure of the commercial agreement and finalise the specifications of petrol, jet fuel and crude oil for the country’s existing refineries.
PSO gets diesel from KPC (Kuwait Petroleum Company) under the GtG deal and purchases petrol from the open market with high premiums depending upon the prices of products in the international market.
Now under the GtG deal, PSO would get petrol from ADNOC at a negotiated price. In addition, PSO would also import jet fuel on a need basis as the country’s refineries cater for jet fuel needs most of the time.