Stepping up efforts for greater energy security in the region, South Asian countries are meeting in Islamabad next week to work out the broad contours of an intra-regional energy cooperation framework.
The move attains significance in the context of rising global crude oil prices that has exceeded $110 per barrel in recent days. The member countries of the South Asian Association for Regional Cooperation (SAARC) are heavily dependent on hydrocarbon imports to meet their energy requirements.
The price of Indian basket of crude oil peaked at a record $100.17 per barrel amid concerns that it could rise further.
India, which imports about 70 per cent of its total crude requirement, faces the twin challenges of containing the import bill and maintaining retail fuel prices at reasonable levels.
During the first ten months of the 2007-08 (April to January), the oil import bill touched $57 billion, which was 16.5 per cent higher than the $48.95 billion in the same period last year.
Energy ministers of the SAARC member countries would also discuss a study on energy trade during the meeting.
A study on energy trade would be tabled during the meeting. Among other things, the study covers prevailing trade regimes, the regulatory and legal frameworks of the member states. It also examines the international and regional best practices and their relevance as well as applicability to the region.
Sources, who did not wish to be identified, said the ministers would examine the viability and modalities for development of transnational energy lines including electricity, gas and oil.
A proposed Iran-Pakistan-India gas pipeline has not made much headway due to political uncertainties and opposition from the US.
“Facilitating and promoting trade in energy in South Asia has been identified as one of the key areas for cooperation. In view of the potential for regional cooperation, an Energy Ring has been conceptualised in the SAARC region," a source said.
The ring would basically consist of inter-country links for exchange of electricity, gas and oil.
"There are several examples in the world where countries of a region have pooled their energy sources on the basis of complementarities. In South Asia also the energy output from various sources varies in different seasons and there are surpluses and deficits that could complement each other," the source said.