There is no restriction on Pakistan to import Iranian oil, the lawmakers were told in the Upper House of Parliament when they asked the government to clarify its position with regard to international sanctions against Iran, Pakistani Daily Times reported.
During the question hour, Senator Safdar Abbasi demanded the government to clarify its position whether Pakistan would keep its relation intact with Iran or cut ties off under the international pressure.
He also questioned that when the government failed to open letters of credit for the import of Iranian oil, then how it would be able to import gas through a gas pipeline. The House was informed in writing that Pakistan Refinery Limited has a long-term contract for the import of 12,000 barrels per day light crude oil from Iran. However, due to current US/ European Union sanctions on Iran, the refinery is facing difficulties in opening L/C, therefore, they are not importing crude oil from Iran since November 2010.
Federal Minister for Petroleum and Natural Resources Dr Asim Hussain clarified that there was no restriction on Pakistan about the import of oil from Iran. He admitted that there were some banks (related to US) that were reluctant to open LCs for oil import. Second thing for stopping of the Iranian oil import is that it is not compatible with oil available in Pakistan, he said, adding that there was a single refinery in Karachi which refined Iranian crude oil, and it had been closed due to some technical reasons.
He further said he was unable to clarify further because it was a sensitive issue and of national importance. About Iran Pakistan gas pipeline project, the minister said the project would be completed under sovereign guarantee of the two governments. He assured that it would be completed in time. He also informed the House that Pakistan was in touch with Iran over currency swap and similar type of agreement had already been signed with China.
In response to Senator Azam Swati's question regarding circular debt, the minister said that the government itself was trying its level best to resolve this issue. The Ministry of Finance assured the Ministry of Petroleum that by end of November 2011, the circular debt issue would be resolved on permanent bases. If this issue were not resolved, it would adversely affect the entire economy. The minister informed the House in written that total receivables of Pakistan State Oil were Rs 168.683 million from government and non-government customers, including WAPDA, PIA, railways, navy, army, NLC, HUBCO, KESC and KAPCO, etc. The PSO has outstanding dues against the government customers worth Rs 38.792 billion and Rs 115.684 billion against non-government customers. The government has chalked out a comprehensive plan to get rid of circular debt and very soon it would be met. To another question, the minister said that 131 exploratory wells of oil and gas were drilled during the last five years in the country.
The minister said that it was a fact that production of oil and gas in the country was less than the demand. However, the government has taken various steps to enhance oil and gas production. He said presently 133 licenses have been granted for exploration of oil and gas in the country besides signing of exploration licences of over 30 blocks during the last year. He said that an agreement was signed with Iran for the import of natural gas and the project would be completed in three years.
To a question, the minister said that SNGPL was bound to contribute its share for the schemes approved by the prime minister up to the cost criteria in the light of approved guidelines.