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Friday, Mar 23, 2007
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Petroleum Industry & Economy - Infrastructure Government - Foreign Relations India tells Pak to cut transit fee, transportation tariff Our Bureau
Figuring it out India looking at transportation tariff of about $0.50 per million British thermal unit, Pakistan wants $1.57 per mBtu. Pakistan seeking transit fee of 10% of the gas price at the India border while India is offering 5%
New Delhi March 22 India joining the tri-nation pipeline project now seems to rest on the issue of transportation tariff and transit fee to be levied by Pakistan. At the beginning of the two-day technical level talks here on the Iran-Pakistan-India (IPI) pipeline project, India on Thursday said that depending on Pakistan's response, latest by the middle of April, it would make its stand clear on whether or not it would participate in the project. India wants Pakistan to bring down the fee for allowing flow of natural gas from Iran to India through Pakistan. At the technical-level talks, senior officials of the Petroleum and Natural Gas Ministry conveyed to Mr Mukhtar Ahmad, Energy Advisor to Pakistan's Prime Minister, that transportation tariff for the 1,036-km pipeline section falling in Pakistan and the transit fee payable to Islamabad has to be brought down for New Delhi to continue in the project.
India's terms
According to official sources, while India was looking at transportation tariff of about $0.50 per million British thermal unit, Pakistan wants $1.57 per mBtu. Pakistan is seeking a transit fee of 10 per cent of the gas price at the India border — price payable to Iran plus transportation cost — while India is willing to pay a maximum of 5 per cent of the gas price at Iran-Pakistan border. After his meeting with the Petroleum Minister, Mr Murli Deora, and the Petroleum Secretary, Mr M.S. Srinivasan, Mr Ahmad said, ``We are very hopeful that we will converge on all the issues and a tripartite deal will be signed in June." Both India and Pakistan are more or less in sync with the pricing formula suggested by Iran. As per the latest formula, the price of the gas at $60 per barrel of crude price came to $4.93 per mBtu. Mr Ahmad told newspersons, ``like we had said previously, the Iranian price formula is acceptable to us.'' While the formula was also acceptable to India, it wanted the issues of transportation tariff and transit fee to be resolved before communicating acceptance.
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