News
Pakistan to offer land, infrastructure to world oil companiesISLAMABAD, July 07 : The government of Pakistan has decided to offer land and infrastructure to world class petroleum companies for setting up refineries in Karachi and Gwadar to minimise country's oil import bill.
The government of Pakistan is offering land and infrastructure for setting up refineries around Karachi and Gwadar to world class refiners like Shell, Aramco, Exxon and China Petroleum, sources said.
The decision was taken by the Economic Co-ordination Committee (ECC) of the Cabinet in its meeting on July 1, held under the chairmanship of Prime Minister Shaukat Aziz, when a comparison of oil prices in Pakistan and India was presented before it.
The committee, sources said, was informed that after increase in international prices of oil, the prices of petroleum products in Pakistan had registered only 17 percent increase, against 40 percent in the international market.
During discussion it was pointed out that prices of petroleum products were higher in the international market, due to higher prices of crude, now hovering around $60-61 per barrel, and to lack of refining capacity.
One member observed that availability of refining capacity in the country could save about $1 billion foreign exchange annually in the oil bill, and suggested that the government should explore the possibility of offering land and infrastructure for setting up refineries.
After detailed briefing and discussion, the ECC decided that a 'blue book', highlighting the incentives and locational advantage to be offered by Pakistan may be prepared by the Board of Investment (BoI), and marketed to international investors of repute in the refining business, sources said.
The foreign trade figures for 2004-05 indicate that the country's oil import bill would exceed $3.9 billion due to higher oil prices across the globe and the surge in local demand, following significant growth in the economy.
The import of crude oil increased by 23 percent, to $1.947 billion, as compared to $1.578 billion during previous year.
The committee was informed that stocks of various petroleum products with oil marketing companies as on June 30 were sufficient for 28 days. Coverage was available: for 66 days in case of furnace oil; 52 days for kerosene; 20 days each for HOBC and HSD; and 15 days each for motor spirit and LDO.
However, it was noted that the stock for JP1 was for 9 days only - lowest amongst other petroleum products.