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| India finally will pay Iran for oil |
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 India has finally worked out the mechanism to pay for Iranian crude oil. The three-pronged disbursement would include opening a rupee account; paying a Turkish commercial bank as well as the UAE’s central bank to clear the annual expense of nearly $12 billion.The scheme envisages opening a rupee account for 20 percent of the annual buy, payments in lira through state-owned Turkiye Halk Bankasi in Istanbul and in Euro through the Central Bank of the UAE. What is left is to identify the Indian bank which would forward these payments as well as run the rupee account, said an Indian Finance Ministry official. That too, he said, should be in place when the inter-ministerial panel meets for a review on Friday. The official said that bank agreements, oil import and payment verification documents were being translated so that the standard formats could be finalized before banks sign the pacts this month. Iran, which recently warned of stopping oil exports from next month, is being informed by the Ministry of External Affairs of the latest developments, he added. Last month, National Iranian Oil Company told Indian refiners such as the Mangalore Refinery and Petrochemicals Ltd. and Essar Oil that a payment mechanism should be put in place failing which exports would be stopped from August. The official said the identified banks were agreeable to the U.S. which is imposing hurdles against Iranian bank accounts under UN sanctions. India, Iran’s second-largest crude buyer after China, is expected to buy close to $12 billion worth of crude oil this year but would export less than $2 billion worth of commodities and machines. Japan and South Korea continue to import Iranian crude but have matching exports to offset their purchase. India’s crisis arose after Reserve Bank of India last December dismantled the Asian Clearing Union mechanism. A temporary route was worked out in February with New Delhi making euro payments through Iranian EIH Bank based in Hamburg, Germany. But under U.S. pressure, Germany soon stopped accepting money for onward transfer. In May, the Cabinet Committee of Security permitted the Finance Ministry to explore various options, including opening a rupee account here, to resolve the issue. --- Iran hopes resolving the problem Iran's caretaker Oil Minister Mohammad Aliabadi said on Wednesday that Iran will not cut oil supplies to India, which will find a way to pay for its exports within the next two months. "Exporting oil to India as one of our traditional and long-term customers will continue and India will solve the problems about the payments for oil exports within the next one or two months," Mohammad Aliabadi said, according to the IRIB. Also, Iran’s OPEC governor Mohammad-Ali Khatibi said that Iran is exporting oil to India, despite receiving no payment for months, to protect its market share from price-cutting competitors such as Saudi Arabia. “Customers are paying into this joint account but the account is controlled by the Indian government so the funds can’t be transferred,” Khatibi told Reuters. Khatibi said Iran hoped to eventually get paid from the joint account when its bank transfer problem is resolved; giving no indication of how much crude Tehran was prepared to send India without seeing a cent. “It seems that Saudi Arabia’s actions in the oil market have the smell of competition,” Khatibi said. (Source: Agencies)   Socialize this Subscribe to our RSS feed to stay in touch and receive all of TT updates right in your feed reader
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| Last Updated on 08 July 2011 15:31 |