Diesel hurdle to gas export talks from Myanmar

Vol 9, PW 15 (03 Nov 05) News in Brief

Gas export talks between India and Myanmar have reached a critical juncture but without any help from the Ministry of Finance, quite the reverse.

Mandarins working with finance minister Palaniappan Chidambaram have apparently turned down a request by authorities in Yangon to pay for proposed diesel imports from the Numaligarh refinery in rupees, not hard currency. Reserve Bank of India officials, it seems, have advised the finance ministry not to accept rupees, citing fears about their origin.

By contrast oil minister Mani Shankar Aiyar supports the payment in rupees, aware of the need to create the right atmosphere if India is to succeed in securing Burmese gas. Under scrutiny is the source of Yangons stockpile of Indian currency, particularly since India and Myanmar do not enjoy thriving bilateral trade and the balance of trade is in tilted heavily in Delhis favour.

Other issues such as delivery point and price of the diesel have been settled.