Print Edition
TT On-The-Go
TT Feed
539
| Solution to Iran oil payment in sight: India |
|
 |
 |
 |
Font Size 
|
New Delhi (PTI) - Days after Iran warned it will stop crude oil supplies to India over payment defaults, the government today said a solution to the over six month long crisis was in sight.
"There is a mechanism (of making payments for Iranian oil) that we are working on. We are very close to a solution. There are banks in multiple countries that have been identified for routing our payments to Iran," a senior government functionary, refusing to be identified, said.
"I cannot reveal more because the moment we identify the banks or countries willing to help us pay for Iranian oil, they will come under pressure from certain countries and may back off. All I can say is that payments will be made in euro," he said.
Perviously, National Iranian Oil Co (NIOC) Managing Director Ahmad Ghalebani as saying that Tehran had "seriously warned the Indian side of the possibility to halt oil exports if a solution is not found to clear its arrears".
On June 27, NIOC had written to refiners like Mangalore Refinery and Petrochemicals Ltd and Essar Oil, who are the principal buyers of Iranian crude, demanding that a mechanism be put in place to pay for its oil supplies, failing which supplies will be stopped from August.
Iran is supplying some 4,00,000 barrels a day of crude to India on credit since late December last year when the Reserve Bank of India scrapped a long-standing mechanism to pay for import from the Persian Gulf nation using a clearing house system run by regional central banks.
"The situation is grave. We need to find an alternative to the scrapped payment mechanism," the official said.
Iran is India''s second largest oil supplier, accounting for 12 per cent of its needs.
As an alternative to Asian Clearing Union (ACU), India tried routing payments through countries like the UAE but failed to find a permanent channel to route nearly USD 13 billion that India pays for Iranian crude annually.
Officials said the only option left with India was to pay in its own currency, rupee.
Korea and China use their own currency to pay for Iranian imports. Iran buys cars and several other commodities including heavy equipment from the two nations from the payments it earns from oil sales, leaving almost nothing by way of actual currency transfer.
  Socialize this Subscribe to our RSS feed to stay in touch and receive all of TT updates right in your feed reader
|