Insurance fund for Iranian crude oil refiners

India will set up an insurance fund worth Rs 2,000 crore rupees ($364 million) to cover refiners buying crude oil from Iran, a move that may help them continue purchasing from the West Asian state.

The fund, to be managed by India’s General Insurance Co, will start after the refiners contribute money to it, Banking Secretary Rajiv Takru said today. The fund will not be guaranteed by the state, he said.

Indian processors may cease buying Iranian crude oil as local insurers refuse to cover risks for using the oil, P P Upadhya, managing director at Mangalore Refinery & Petrochemicals Ltd, said March 8.     

The US and its allies enacted sanctions in July to restrict Iran’s oil exports, its largest source of revenue. The countries are trying to pressure the Persian Gulf nation to curb its nuclear programme.