India starts exporting diesel to Myanmar

India has started exporting diesel to Myanmar via a land route, in a boost to Prime Minister Narendra Modi's pledge to enhance hydrocarbon trade with neighbouring countries.

Modi, who is due to start a three-day visit to Myanmar on Tuesday, wants to expand ties with eastern neighbours to develop India's landlocked northeastern states.

Northeast India-based refiner Numaligarh Refinery Ltd (NRL) delivered a trial consignment of 30 tonnes of diesel fuel to Myanmar's Parami Energy Group in Myanmar by land, the Indian government said in a statement on Monday.

NRL, which wants to treble its refining capacity to 180,000 barrels per day, is looking at further strengthening its business ties with Parami Energy Group after the trial, it said in a statement.

The refiner has already exported 1,700 tonnes of paraffin wax to Myanmar.

Indian oil minister Dharmendra Pradhan visited Myanmar in February, scouting for opportunities in oil exploration, refining and products retailing.

NRL, a unit of state-run Bharat Petroleum Corp., reiterated that it is also exploring the possibility of laying a pipeline to export diesel to Myanmar and enter into retail sales.

Myanmar currently relies on imports from Thailand and Singapore to meet the bulk of its consumption of 3 million tonnes a year of gasoline and gasoil. Its local output of the two fuels is about 700,000 tonnes, NRL said.

As consumer wealth, infrastructure and car ownership in Myanmar rises, the country's refined fuels consumption is set to increase by 6 percent annually on average over the next 10 years, according to BMI Research, a unit of credit ratings agency Fitch Group.