Pakistan intends to import 1.5 million tons of petrol per year from the United Arab Emirates.
According to a report by a national daily, the Government of Pakistan is working on an inter-governmental agreement (IGA) for importing petroleum products on a government-to-government (G2G) basis from the region. Concerned departments have already decided to write a letter to initiate the process.
Pakistan is aiming to secure a five-to-eight-year deal in which it would import 30 cargoes of petrol (mogas) in one year, or 2.5 to 3 cargoes a month from the UAE. According to sources, Pakistan has already signed the same IGA template with Qatar, Oman, Saudi Arabia, and other countries that will be sent to the UAE. After the IGA is signed, the two countries will negotiate on the import of petrol, crude oil, and jet fuel in a G2G deal.
The report stated that the top officials from both sides agreed to enter a G2G deal for the import of petrol during the Abu Dhabi talks held earlier this month. Once secured, this deal will ensure Pakistan’s sustainable availability of petroleum products and provide monetary ease with regard to premiums on the import of petroleum products.
Pakistan State Oil (PSO) and Abu Dhabi National Oil Company (ADNOC), after the agreement on the IGA, will start talks for a commercial agreement, representing their respective countries. Pakistan is looking to secure IGA and business deals before the end of the outgoing calendar year in order to start importing petroleum from the UAE as soon as January 2023.
Once the IGA is signed, the two countries will finalize the specifications for petrol, jet fuel, and crude oil for the country’s existing refineries.
Currently, through a G2G deal, PSO gets diesel from Kuwait Petroleum Company (KPC) and buys petrol from the open market. This doesn’t come cheap, as depending on the prices in the international market, it has to bear high premiums. Under the above-mentioned G2G agreement, PSO will receive petrol from ADNOC at a negotiated price, as well as jet fuel on a need basis.
