Indian refiners pay $700 mn oil dues second tranche to Iran

According to an official source, Essar Oil paid $338 million, MRPL $299 million, IOC paid $60 million, while HPCL remitted $3 million

Indian refiners on Tuesday paid Iran $700 million towards part settlement of its oil dues, in the second instalment payment following Iran's landmark nuclear deal with world powers in July paved the way for easing sanctions against the country.

An official source here said that Essar Oil paid $338 million, Mangalore Refinery and Petrochemicals (MRPL) $299 million, Indian Oil Corp paid $60 million, while Hindustan Petroleum Corp (HPCL) remitted $3 million.

The four refiners had paid a total of $700 million on September 30, and with Tuesday's payment they have cleared more than a fifth of the $6.5 billion outstanding owed to Iran for oil supplied.
 

Like the previous instalment, the $700 million payment was made in rupees equivalent to the Kolkata branch of state-run UCO Bank for transmitting to the Reserve Bank of India, which will make arrangements for its onward remittance to Iran.

The US Treasury, in August, approved payment of $1.4 billion out of India's $6.5 billion outstanding oil payments to Iran.

In August, Iran asked India to pay, within the next two months, the dues on account of oil supplies that have accumulated since 2013 with sanctions on the country blocking payment routes.

Iranian Foreign Minister Javad Zarif had said here that Iran's central bank and government officials were working with their Indian counterparts on the technicalities of the settlement of India's oil import dues.

Since February 2013, Indian state-run and private refiners have paid around 45 percent of the payment due in rupees, through the Kolkata branch of the state-run UCO Bank.

The balance has been accumulating, pending finalisation of a payment route and mechanism.

Iran was until 2006 India's second-largest supplier of crude oil, but dropped to number seven by the end of 2013-14.

With regard to the payment mechanism, the RBI, earlier this month, clarified that the rupee's value will not be impacted in any way owing to the payment of $700 million to Iran for settling earlier crude oil import bills.