ISLAMABAD: Pakistan has forwarded a draft of an Intergovernmental Agreement (IGA) between Pakistan State Oil (PSO) and Abu Dhabi National Oil Company (ADNOC) to the United Arab Emirates for import of Mogas under government-to-government mode
“We have sent the draft IGA to the UAE for approval. Once it is signed, trade talks will begin between state institutions of the two countries,” a senior energy ministry official said. confirmed this publication.
According to the agreement, Pakistan is willing to import 1.5 million tonnes of motor spirit annually, which is equivalent to 30 cargoes a year, in an agreement that is expected to last for 5 to 8 years.
A monthly breakdown would mean that Pakistan would import two and a half to three cargoes per month from the Gulf state.
The agreement was advanced as a follow-up to talks held in Abu Dhabi during the first week of November 2022. In the talks, the two sides had agreed to enter into a GtG agreement for the import of Mogas and jet fuel.
This will help Pakistan in sustainable availability of petroleum products in the country. More importantly, the GtG deal will also provide a financial relief in terms of premium in the import of petrol and other products,” the official said, adding that he was hopeful that the trade agreement between PSO and ADNOC would be signed on the IGA. After that will be finalized soon.
Pakistan hopes to start importing petrol from January 15, 2023 under this agreement.
Once the agreement is signed, the two sides will begin negotiating the structure of the trade agreement and finalize the specifications of petrol and jet fuel, the official explained.
Currently, PSO procures diesel from Kuwait Petroleum Company under a similar agreement and buys petrol from the open market at a premium to the product prices in the international market.
But the deal will allow PSO to get petrol from ADNOC at a fixed price. In addition, PSO will also import jet fuel on a need basis as the country’s refineries meet most of the jet fuel requirements.
