India, Pakistan Agree on Uniform TAPI Fee

India and Pakistan on Wednesday agreed in principle on having a uniform transit fee for wheeling gas from Turkmenistan through the proposed $7.6-billion pipeline but Islamabad remained non-committal on opening its gates for importing Indian motor fuels. 

The broad agreement on the transit fee is in stark contrast to the other transnational energy lifeline the two countries are involved in. Differences over transit fee and, as some government officials say price of gas, have held up progress on a similar pipeline from Iran. 

The agreement on transit fee for the Turkmenistan pipeline came through during a meeting between oil minister S Jaipal Reddy and his Pakistani counterpart Asim Hussain here. According to the deal, the Pakistani side would charge the same transit fee that India negotiates with Afghanistan "in line with international practices". 

"There can't be one transit fee for India and Afghanistan and another for Pakistan and Afghanistan... It should be the same in-principle," Reddy said after the meeting. 

"It is between the three countries (Afghanistan, Pakistan and India) to agree to it (uniform tariff). It is subject to the approval of competent authorities in both the governments," Hussain added. 

India has to pay a transit fee to Pakistan and Afghanistan for getting its share of 38 mcmd (million cubic metres per day) of gas. Islamabad, however, has to pay transit fee to only Afghanistan. 

The 1,735-km-long pipeline will run from Turkmenistan's Yoloten-Osman gas field to Herat and Kandahar province of Afghanistan, before entering Pakistan. In Pakistan, it will reach Multan via Quetta before entering India at Fazilka in Punjab. 

During the talks, India also brought up the issue of exporting diesel and petrol to Pakistan, eventually through pipelines, which is cheaper than shipping or rail-road transport, if Islamabad guaranteed long-term purchase deals. 

Pakistan imports nearly half its fuel requirements from mainly Kuwait and Saudi Arabia which offer discounts and delayed payment facility. The two countries, however, recently were reported to have turned down a request for extending the credit period from two months to a year. 

Indian refiners may find it hard to match these soft commercial terms. But even if they do, Pakistan has to first remove petrol from its list of items that are not allowed to be imported. Hussain said the Pakistani government does not import any petroleum products on its own since the entire imports are done by the private players.

Source: Times of India