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India, Afghanistan fail to reach a consensus on transit fee for TAPI project

19 Apr 2012 Evaluate

Technical teams of Afghanistan, India and Pakistan have failed to reach a consensus on transit fee for gas passing through Afghan territory under the Turkmenistan-Afghanistan-Pakistan- India (TAPI) pipeline project.

Consequently, India and Pakistan could not reach a conclusion over the transit fee for the segment of the pipeline passing through Pakistan. Pakistan-India fee arrangement is linked to the fee agreement India and Afghanistan. Under the $7.6-billion project Afghanistan will charge Pakistan and India a transit fee for gas passing through the pipeline from Turkmenistan and Pakistan will charge India the same amount as the Afghan side.

As per media reports, Afghanistan had demanded 54 cents per MMBTU (million British Thermal Unit) as the transit fee but this was rejected by India. Subsequently, the Afghan side made a demand of 50 cents per MMBTU and India responded with an offer of 47 cents. The difference between the two sides was just three cents per MMBTU and can settled if the teams get political support from the Indian and Afghan leadership and a push from the US, which is supporting the project.

Pakistan has termed the talks as a ‘failure’ whereas India officials have stated that the talks were held in a positive atmosphere and there was considerable progress on all major issues.

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