India, Pakistan agree to transit fee formula for TAPI gas pipeline project

New Delhi, Jan 25 (ANI): India and Pakistan on Wednesday agreed to a transit fee formula for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.

The latest development came following the meeting between Petroleum Minister S. Jaipal Reddy and his Pakistani counterpart Dr. Asim Hussain here today.

This was the third meeting with Pakistan on the issue of transit fee but the 1st one at the political level.

Both sides agreed that the negotiations would be conducted in a transparent manner keeping in mind the overall economics of the pipeline. Since there is a need to expedite the signing of the Gas Sale Purchase Agreement (GSPA), both sides agreed to settle the transit fee issue at the earliest.

Pakistan agreed in-principle that whatever fee formula is eventually settled between India and Afghanistan would also be acceptable to Pakistan subject to approval of their competent authority.

Both ministers also discussed other issues of bilateral interest such as trade in petroleum products.

Reddy offered export of petrol, diesel, aviation turbine fuel and fuel oil besides sulphur, polyethylene and polypropylene since Pakistan is importing these products currently. It was pointed out that the main advantage for Pakistan will be the savings in freight cost since several refineries in India are located close to the India-Pak border.

India also offered to export refined petroleum and petrochemical products by road, rail and by sea. It was also mentioned that Indian refineries would be willing to look at the feasibility of constructing product pipelines to Pakistan provided long-term guarantees for product offtake can be given by Pakistan.

Both sides said that a India-Pakistan Joint Working Group (JWG) on Petroleum and Petrochemical Products has been constituted recently to go into the specific details of facilitating trade in this sector, including infrastructure upgradation and augmentation in respect of railways, customs facilitation, setting up of banking channels.

Both ministers also agreed to advise their respective officials to hold the first meeting of the JWG at the earliest. (ANI)