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Indian Oil Giants Gear Up for Pakistani Market

  • With in-principle status of Most Favoured Nation (MFN) granted to India by Pakistan, Indian oil companies – such as the Hindustan Petroleum Corporation (HPCL), the Indian Oil Corporation (IOCL) and GAIL India – are gearing up to cash in on the opportunity by exporting petroleum products and gas to its energy-starved neighbour. Pakistan’s existing refining capacity meets only half its total domestic requirement, while India now exports almost one fourth of its 185 million tonne refining capacity.

  • “Pakistan’s move to ease trade with India could translate into a big opportunity for HPCL, as it will be best positioned to use its INR19,000 crore Bhatinda refinery as a critical gateway. It will be a pragmatic business model, where revenue will more than offset relatively low investment in the pipeline,” said a Mumbai-based oil analyst.

  • Affirming speculation, an HPCL board member told the Times of India on Saturday that: “we plan to tap capital markets as soon as our Bhatinda refinery is nearing completion. A part of the initial public offering proceeds will be used to build a product pipeline to Lahore. We are strategically located to sell our products to Pakistan as the border is less than 50 km away from our refinery.”

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