|Ignore U.S. ire, crisis drives India to turn to Iran for oil||
As its current account deficit widens and the value of the rupee dwindles, India plans to increase crude oil imports from Iran so as to save $8.5 billion in foreign exchange.
Petroleum and Natural Gas Minister Veerappa Moily has sent the proposal to Prime Minister Manmohan Singh.
Yielding to sanctions imposed on Tehran by the U.S. and the European Union, India slashed crude imports from Iran by 26.5 percent during 2012-13, buying just 13.1 million tons, against 18.1 million tons the previous year. In his note to Dr. Singh, Mr. Moily said that in the remainder of the year, the country should import 11 million tons so as to save $8.5 billion on foreign exchange. New Delhi, which spent $144.29 billion for oil imports last fiscal, pays Tehran in rupee, unlike other countries.
Officials in the Petroleum Ministry said about two million tons had so far been imported from Iran. Import of an additional 11 million tons would help to cut the foreign exchange outgo by $8.47 billion (given that crude rules at $105 a barrel).
Because of the sanctions, India pays Iran in rupee through a UCO Bank branch in Kolkata. Since July 2011, India had been paying Iran through the Ankara-based Halkbank in euro for 55 percent of its oil purchases. The rest was remitted in rupee in the accounts of the National Iranian Oil Company in UCO Bank. However, payments in euro ceased on February 6. Iran was India’s second biggest supplier after Saudi Arabia in 2010-11. However, during 2012-13, it supplied only 13.1 million tons, lagging behind Saudi Arabia, Iraq, Venezuela, Kuwait and the United Arab Emirates.
In 2011-12, Iran stood third with 18.1 million tons, against 32.5 million tons from Saudi Arabia and 24.1 million tons from Iraq.
In 2009-10, it supplied 21.2 million tons. During 2012-13, Iranian supplies accounted for 7.2 percent of India’s oil imports, down from 10.5 percent during 2011-12.
(Source: The Hindu)
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