Kuwait is said to have agreed to give 0.2 million tons of diesel monthly to Pakistan on two months credit for an indefinite period, official sources told Business Recorder. The source said this understanding was reached between Pakistan and Kuwait during the recent visit of President Asif Ali Zardari. Prime Minister''s Advisor on Petroleum, Senator Dr Asim Hussain also accompanied the President. Kuwait is Pakistan''s second largest oil supplier.
Kuwait''s pledge has come at a time when Pakistan is seeking financial assistance from friendly countries to contain the burgeoning fiscal deficit. Pakistan made a similar request to Saudi Arabia when Interior Minister, Rehman Malik visited the Kingdom, soon after the killing of Osama bin Laden. King Abdullah has reportedly assured all out support to Pakistan.
The sources said Kuwait will also give 25000 tons of aviation fuel and 0.3 million tons of Liquefied Petroleum Gas (LPG) on deferred payment. Another major development, sources said, is that Kuwait has agreed to maintain premium on diesel for further sixth months. Pakistan''s daily oil consumption is about 0.4 million tons whereas local production is only sufficient to meet 12 per cent requirements of the country.
Pakistan''s oil import bill during the first 9 months (July-March) of current fiscal year stood at $8.088 billion against $7.344 billion during the same period last year, showing slightly higher than 10 per cent increase. According to sources, Russia has also shown an interest in TAPI and committed about $500 million dollar for Turkmenistan-Afghanistan-Pakistan-India Pipeline (TAPI). Russian energy company Gazprom recently showed an interest in the project.
TAPI is a Western-backed rival to an Iranian pipeline from the South Pars gas field in the Persian Gulf. A meeting of experts'' of all concerned countries is scheduled on July17-18 in Kabul to discuss gas prices'' fixation mechanism. Pakistan has already rejected linkage of gas price with alternative fuel.
Pakistan is expected to offer gas price based on cost of production, profit margin, insurance and transit cost instead of alternative fuel ie LPG, LNG and crude oil. Russians are also interested in offshore projects and they are dispatching their delegation to meet with those engaged in Pakistan''s oil and gas sector.