The Economic Coordination Committee(ECC) has allowed Kuwait Petroleum Corporation to setup an oil refinery in the coastal areas of Baluchistan, enabling Pakistan to reduce the import of refined petroleum products.
Kuwait Petroleum showed deep interest in setting up the refinery in a remote part of Baluchistan, after measuring the long lasting effects of such an investment, ECC found it in the best interest of the country to allow Kuwait Petroleum to setup the refinery.
ECC also permitted import of furnace oil and jet fuel, currently Pakistan State Oil imports oil from Gulf States with a payment period of 90 days. Kuwait petroleum had already expressed its desire to export oil to Pakistan as part of existing arrangement along with setting up an oil refinery.
An official from ECC meeting said,
Pakistan and Kuwait have an old bilateral relationship in terms of oil trade and Kuwait Petroleum is a time-tested supplier, well-reputed for the most economical supplies, product quality and supply security
ECC also directed PSO, the oil giant, to persuade Kuwait petroleum to extend the payment period from 90 to 120 days in order to ease the burden on the economy.
Initially, oil products were sold on a long term basis giving more time for payments however, due to market deregulation in 2001, PSO entered into a fuel supply contract with Kuwait after which an agreement was signed between both countries and has been in practice since 15 years.
The new agreements with Kuwait Petroleum will ease the payment method for Pakistan and create favorable environment.
Due to CPEC, rapid developments have been initiated at the Gawadar Port which has attracted foreign investment. Recently Turkey, Malaysia and several Asian states have shown keen interest in investing in Baluchistan.
In June, a Kuwaiti firm EnerTek signed a Memorandum of Understanding (MOU) with the Baluchistan government to establish solar energy plant in Quetta to meet the energy requirements of the area. EnerTek plans to install over 50 solar plants in the region.
In light of the recent developments, it is encouraging to see that the long neglected province of Baluchistan is finally heading in a positive and constructive direction. These mega projects will allow Baluchistan to maximize the potential of its natural resources and reduce dependency on the center.