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Pakistan blocks fuel supplies for NATO forces in Afghanistan

October 15, 2011 - Islamabad

Pakistan has stopped all supplies of motor spirit (petrol) and high-speed diesel to the US Defence Energy Supply Company, which is catering to the energy requirements of NATO forces in Afghanistan, according to a news report.

The ban has been implemented with immediate effect, The News quoted a senior official at Pakistan's Petroleum and Natural Resources Ministry, as saying.

Until now, the US Defence Energy Supply Company was being provided petrol and high-speed diesel without the petroleum levy and Generate Sales Tax, which is otherwise being levied on Pakistani consumers.

According to a Petroleum Ministry official, Pakistan had been extending the supply of the POL products at subsidised rates to NATO forces since 2002-03, and had sustained a colossal loss of 35 billion rupees in the process.

The Minister for Petroleum and Natural Resources, Dr Asim Hussain, confirmed that six oil-marketing companies- including Pakistan State Oil, Attock Petroleum Company, Total-Parco, Shell and Byco- had been directed to stop the supply of petrol and high-speed diesel to the US company.

"However, jet fuel will continue to be provided to the US," the minister said, adding that this was being done because there was no levy on jet fuel in Pakistan.

"The huge loss of Rs35 bn sustained by Pakistan, due to the non-payment of the usual levies etc., should be compensated by the company," another official at the Ministry of Petroleum and Natural Resources was quoted as saying.

On this, Hussain said that in case the US company sought the restoration of supply with an offer of payment of all future taxes as well as payment of previous tax dues since 2002-03, he would be ready to negotiate.


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