Islamabad: Iran will mediate between India and Pakistan to end a deadlock on the issue of transit fees to be paid by New Delhi for gas transported through a $7.5-billion pipeline to be built by the three countries.
Iranian President Mahmoud Ahmadinejad has constituted a four-member committee of officials to hold talks with Pakistan and India on the transit fee issue. He has given the panel 45 days to settle the issue between the two countries and submit a report to him, sources in Pakistan’s petroleum ministry told the Daily Times.
Pakistan and Iran were set to sign a bilateral gas sale purchase agreement (GSPA) for the Iran-Pakistan-India gas pipeline project by 31 May but would now sign the pact after the Iranian committee resolves the transit fee issue between Pakistan and India, the sources said.
Pakistan and India too could sign a gas transit fee agreement when the GSPA is signed by Iran and Pakistan, they said.
Former Pakistan Petroleum Minister Khwaja Asif and Indian counterpart Murli Deora had said after talks here on 25 April that the gas transit fee issue would be addressed soon but no progress has been made as yet in the matter, the sources said.
The sources said India had offered a gas transit fee of 15 cents per million British thermal units (MMBTU) whereas Pakistan had demanded 60 cents. They added that India had subsequently agreed to pay 30 cents per MMBTU as transit fee.
The sources said the Indian team led by Deora had assured Pakistan approval would be sought from the competent authority and a decision conveyed in a week’s time. However, Pakistan has not got a response from India so far, the report says.
The committee now formed by the Iranian President will work to resolve the issue, the sources said.
India also wants Pakistan to charge a fixed transit fee for the lifetime of the project. However, Pakistan has turned down this demand and is of the view that the determination of the transit fee should be based on gas sales price in line with international standards, the report said.
Pakistan and Iran have finalized the draft GSPA, which contains a provision for revision of the gas price. Therefore, Pakistan believes that the transit fee should be based on revised gas prices, the sources said.
They said that the transportation tariff for the gas will be determined after the finalization of the feasibility report on the section of pipeline to be built in Pakistan and a company will be set up to implement the project and arrange security according to a mutually agreed framework.