ISLAMABAD: Pakistan has forwarded a draught of an intergovernmental agreement (IGA) to the United Arab Emirates for the import of mogas in a government-to-government format between Pakistan State Oil (PSO) and Abu Dhabi National Oil Company (ADNOC)
“We have requested the UAE’s approval of the IGA draught. After it is signed, business negotiations will start between the governments of the two nations, a senior Energy Ministry official stated to the publication.
In accordance with the contract, Pakistan wants to import 30 cargoes, or 1.5 million tonnes, of motor spirit annually. The contract is intended to endure for 5-8 years.
If the imports were broken down monthly, Pakistan would receive two to three cargoes from the Gulf nation each month.
A follow-up to the negotiations that took place in Abu Dhabi the first week of November 2022 resulted in the agreement. A GtG agreement for the import of mogas and jet fuel had been reached during the negotiations by both parties.
This would make petroleum products more readily available in Pakistan in the long run. The GtG agreement would also, and maybe more importantly, reduce the costs associated with importing gasoline and other goods, the official said, adding that they hoped the commercial agreement between PSO and ADNOC would be completed quickly after the IGA was signed.
The agreement calls for Pakistan to start importing gasoline on January 15, 2023.
After the agreement is signed, both parties will begin discussions to finalise the terms of the commercial agreement and the requirements for gasoline and jet fuel, the official stated.
As of right now, PSO receives diesel from Kuwait Petroleum Company under a comparable deal and buys gasoline on the open market with substantial surcharges based on the costs of goods on the global market.
But with this agreement, PSO would be able to purchase fuel from ADNOC at a discounted rate. Additionally, because the nation’s refineries typically meet jet fuel needs, PSO would also import it as needed.