New Delhi, Jan. 14: Pakistan petroleum secretary M. Abdullah Yusuf met his Indian counterpart B. K. Chaturvedi to explore the possibility of importing diesel from India and closer co-operation in the hydrocarbon sector.

Sources say Yusuf indicated that Pakistan could exclude diesel from the negative list of imports from India if the fuel was made available at a ‘cheap price’. Currently, Pakistan sources its petroleum products from Gulf countries such as Kuwait and India will have to deliver the fuel at a lower price.

Oil industry analysts, however, do not see Pakistan emerging as a major buyer for Indian diesel as Islamabad would not like to upset the ‘very cosy’ relationship that it enjoys with these Islamic nations and from which it derives its long-term energy security.

The huge crude reserves that the Gulf countries possess can offset any advantage that Indian refineries have due to their proximity to Pakistan since they have to depend on crude imported from the Gulf and even distant Nigeria. Pakistan has in the past put an abrupt end to sugar imports from India even though it was getting the commodity at a cheaper price than what other countries were offering.

India enjoys a transport cost advantage due to its proximity to Pakistan compared with the huge shipping freight that other sugar exporting countries like Brazil have to incur.

However, the hostility factor had been uppermost on the mind of the Pakistani leadership as it did not want India to derive any economic advantage through cross-border trade. Even though India has accorded the most favoured nation status to Pakistani exports, it has had to contend with a ban on most goods.