Pakistan seeks UAE deal to import 1.5m tonnes of petrol a year

ISLAMABAD: The government has decided to send a letter to the UAE government this week to start the process of signing an intergovernmental agreement (IGA), paving the way for an intergovernmental agreement on the import of $1.5 million-tons of gasoline per annum.

Pakistan intends to import 1.5 million tonnes of Mogas in a year, or 30 consignments, under the 5-8 year agreement, which means the country will import two and a half to three consignments per month from the UAE. “We have signed the IGA template with Oman, Qatar, the Kingdom of Saudi Arabia and some other countries, which will be sent to the UAE for review and signature by the authorities. Once the IGA is signed, the two countries will start importing Mogas (gasoline), crude oil and GtG agreement on jet fuel,” a senior Energy Department official told The News.

During talks in Abdul Dhabi in the first week of this month, senior officials from both sides agreed to a GtG agreement on the import of gasoline, crude oil and jet fuel. “This will help Pakistan to have a sustainable supply of petroleum products in the country. More importantly, the GtG agreement will also provide monetary comfort in terms of premiums on imported gasoline and other products.”

Once the IGA is finalized and signed, ADNOC (Abu Dhabi National Oil Company) will initiate negotiations on a commercial agreement on behalf of Pakistan, public state-owned company Pakistan National Oil Corporation (PSO) and UAE representatives on a GtG basis. Pakistan wants to sign the IGA and business deals by December 31, 2022 so that from January 2023, it can start importing oil from the UAE on a GtG basis. Following the signing of the IGA, the two sides will start negotiations on the structure of the commercial agreement and finalize the specifications of gasoline, jet fuel and crude oil for the country’s existing refineries, the official explained.

PSO obtains diesel from KPC (Kuwait Petroleum Company) under the GtG agreement, and purchases gasoline from the open market at a high premium based on the product price in the international market.

Now under the GtG agreement, PSO will get gasoline from ADNOC at negotiated prices. In addition, PSO will also import jet fuel as needed, as the country’s refineries meet jet fuel demand most of the time.