India may explore fuel supply to Pakistan, Bangladesh

India is expected to tap the potential of fuel supplies to neighbouring Pakistan and Bangladesh as Modi diplomacy paves way to proactive trade initiatives.

The list could extend beyond the two countries to include Sri Lanka, Bhutan, Afghanistan, Nepal, Burma, Mauritius and Maldives, sources say.

''It is obviously too early in the day but there is tremendous potential for India's oil companies to supply fuels to Pakistan and Bangladesh. Petrol and diesel can be transported by pipelines once plans are in place,'' reports quoted oil sector official as saying.

Pakistan is currently facing acute shortage of auto fuels and Pakistan State Oil (PSO), the national oil company, is reported to have failed to supply fuel to any domestic or international flight after it ran out of jet fuel on Tuesday.

PSO was trying to arrange fuel for the international flights on emergency basis, reports said.

Reports said several national establishments, including Pakistan International Airlines (PIA), owed around Rs18,000 crore to PSO, which in turn owed over Rs1,800 crore to local refineries and Rs8,000 crore to foreign companies.

Reports say that if India opts to supply fuel to Pakistan, Hindustan Petroleum Corporation whose Bathinda refinery in Punjab would be ideally suited to meet Pakistan's requirements. It can be done by building a 100-km pipeline to Lahore to carry petrol and diesel.

HPCL is also reported to have already factored in this possibility in the business plan for the refinery, which is a joint venture with the Lakshmi Mittal group. The present capacity is nine million tonnes and the products are distributed across north India. In the event Pakistan emerges a viable market in the future, the Bathinda refinery's capacity can be doubled to 18 million tonnes.

Similarly, Bharat Petroleum's 3 million tonne refinery in Numaligarh, Assam can be a used to supply fuel to Bangladesh by erecting a pipeline.

BPCL is exploring the option of increasing capacity at the Numaligarh refinery to 9 mt, but this will also depend on the ease of crude supply. However, in the event of expansion plan is carried out, Bangladesh and perhaps Burma could be potential markets for the future.

There have been several initiatives by the earlier governments to kick off bilateral trade with Pakistan, but some glitches in the recent past have derailed the process. It remains to be seen if the Modi government succeeds in regaining the lost momentum.