Saturday, March 24, 2012

India solving Pakistan's gas problems

India might have slipped in managing fiscal deficit. However, nothing beats it when it comes to bridging trust deficit. As the neighboring country Pakistan reels under a gas crisis, GAIL, the biggest domestic gas player has offered a helping hand. The latter has come up with a proposal to export LNG to Pakistan. In the past, Pakistan has declined the proposal of import of liquid fuels from India as it could get a better deal from Gulf nations. However, it may be a different case this time. This is because gas caters to 53% of Pakistan's energy needs. The ongoing gas crisis has led to factory shutdowns, the impact of which is evident from country's export statistics. What makes matters worse for Pakistan is the lack of its own imported gas terminal and a long time needed to come with a new one. Hence, accepting the proposal will make economic sense for it.

As far as GAIL is concerned, the extension of pipeline to Pakistan needs minimum investment and the proposal may spin money for the company.  While we appreciate such confidence building measures, exporting gas at times when India itself is gas starved raises slight skepticism.

No comments:

Post a Comment