Mumbai, India (BBN)-Pakistan and Bangladesh could be key markets for India’s auto fuels if Monday’s diplomacy display paves the way for proactive trade in the future.
The two countries were part of a South Asian parade at Narendra Modi’s swearing-in as Prime Minister where the list included Sri Lanka, Bhutan, Afghanistan, Mauritius, Nepal and Maldives, reports Business Line.
“It is obviously too early in the day but there is tremendous potential for India’s oil companies to supply fuels to Pakistan and Bangladesh. Petrol and diesel can be transported by pipelines once plans are in place,” a top oil sector official told Business Line.
In the process, one of the biggest gainers could be Hindustan Petroleum Corporation whose Bathinda refinery in Punjab is ideally suited to meet Pakistan’s requirements.
All it will take is building a 100-km pipeline to Lahore, which will carry petrol and diesel.
HPCL had already factored in this possibility in the business plan for the refinery, which is a joint venture with the Lakshmi Mittal group.
The present capacity is nine million tonnes and the products are distributed across north India. In the event Pakistan emerges a viable market in the future, the Bathinda refinery’s capacity can be doubled to 18 mt.
Similarly, Bharat Petroleum’s three mt refinery in Numaligarh, Assam, can be a useful supply point for Bangladesh where, once again, a pipeline will do the trick.
Many years ago, BPCL had contemplated using the water route for carrying petrol and diesel to Bangladesh. Eventually, nothing came out of it because this would have needed the governments of both countries to reach an understanding first.
Interestingly, BPCL is exploring the option of increasing capacity at the Numaligarh refinery to nine mt.
All this will, of course, depend on the ease of crude supply following such expansion but in the event if does happen, Bangladesh could be factored in as a potential market for the future. Burma, likewise, could be added to the list.
Over the years, there have been a host of initiatives to kick off bilateral trade with Pakistan except that there have been glitches which derailed the process.
It now remains to be seen if the Modi-led BJP Government is keen on rewriting a new script for South Asia.
Analysts believe the time has come for India to play a far more proactive leadership role in the region.
Within the energy space, this will perhaps become more critical with the overwhelming presence of China.
While Indian oil companies already have a retail business in neighbouring countries, pipeline networks with Pakistan and Bangladesh will set the pace for greater business opportunities in the future. The challenge is to make it happen.
BBN/SS-30May14-4:00pm (BST)
