Pakistan has recently approved an accord with Iran to go ahead with gas pipeline project even at enhanced price. It cleared the way for the gas pipeline project with Iran by accepting price purchase formula offered by Tehran. The Cabinet accepted Iran’s offer to export one billion cubic feet per day of the gas at 80 per cent of the crude oil price in the international market. A sale-purchase agreement is likely to be signed in 2009.
India Pulls Out
India’s decision to pull out of the project has also pushed up the costs but Pakistan decided to go ahead hoping India would ultimately join it. Pakistan had factored in its needs without caring about “US pressure, that forced India to pull out of it.
India’s decision to pull out of the project has also pushed up the costs but Pakistan decided to go ahead hoping India would ultimately join it. Pakistan had factored in its needs without caring about “US pressure, that forced India to pull out of it.
The Cabinet approved Pakistan’s accession to the International Convention for the Suppression of the Financing of Terrorism which requires parties to take steps to prevent and counteract the financing of terrorism whether direct or indirect through groups claiming to have charitable, social, or cultural goals or which engage in illicit activities.
The Government would own responsibility of paying Rs 31 billion outstanding against the Karachi Electric Supply Company to help its management invest the promised amount of Rs 28 billion on development projects to increase power generation.
The Government decided to set up a four-member committee to oversee Gwadar port operations. It would also propose incentives for the proposed export processing zone. It decided to review the Pak-Afghan transit trade agreement to safeguard the country’s interests while facilitating the Afghan trade.
It decided to levy 25 per cent regulatory tax on export of molasses because its production had dropped after a decline in sugarcane production.
Other Issues
The Government approved draft Anti-Money Laundering (Amendment) Bill, 2009. The proposed amendments are necessary to bring the various provisions of Anti-Money Laundering Ordinance, 2007, in line with international standards.
India has not given any clear indication about joining the 2,775-km-long pipeline project, costing $7.5 billion. However, reports have suggested that India wants differences with Pakistan on transit fees and other issues to be resolved before it moves ahead with the project.
India has not given any clear indication about joining the 2,775-km-long pipeline project, costing $7.5 billion. However, reports have suggested that India wants differences with Pakistan on transit fees and other issues to be resolved before it moves ahead with the project.
Pakistan also decided to finalise a gas import agreement with Iran and to use the imported gas for power generation in place of furnace oil. Although the price of Iranian gas would be comparatively higher, it would be cheaper than the furnace oil. The cabinet also decided to go in for aggressive exploration of natural resources to reduce the country’s dependence on imported oil and gas.
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