India pays another $500 mn in oil dues to Iran

India today paid Iran USD 500 million to clear a part of its past dues for crude oil it buys from the Persian Gulf nation.
The payment made today was in addition to USD 400 million India paid on October 21, industry sources said.
Mangalore Refinery and Petrochemicals Ltd (MRPL) paid about USD 217 million and almost an equal amount was paid by private sector Essar Oil. The remaining amount was mostly paid by Indian Oil Corp (IOC).
The USD 900 million payment in two weeks is on top of USD 1.65 billion the refiners had paid in June/July. Cumulatively, refiners owe about USD 6 billion to Iran.

Sources said on October 21, MRPL had paid about USD 183 million, Essar Oil USD 172 million, IOC USD 41 million and Hindustan Petroleum Corp Ltd (HPCL) USD 4 million.
The United States and five other world powers had in July granted Iran access to USD 2.8 billion of its funds held in foreign banks. This was in addition to USD 4.2 billion Iran had received between January and July.

Of the USD 2.8 billion, USD 900 million was to come from India, sources said.
Iran and the United States, China, France, Germany, UK and Russia had in July agreed to extend a six-month interim accord until November 24 pending a long-term deal to end their nuclear dispute.

Sources said the USD 900 million had to flow out before November 24.
Indian refiners had paid the previous USD 1.65 billion in three equal instalments of USD 550 million each - first on June 26, second on July 8 and third on July 24.
Since February 2013, when the US blocked payment channels to Iran for its nuclear programme, India has been paying 45 per cent of its Iran oil bill in rupees through a UCO Bank branch in Kolkata. For the remainder, it had been waiting for a way to make the payment.
As much as USD 4 billion had been accumulated in past dues.

Sources said the payment mechanism used in June/July was again be used to clear USD 500 million dues.
Rupee payments equivalent to USD 500 million was deposited by Indian refiners in the UCO Bank account, which will now be transferred to the Reserve Bank of India for onward credit to the central bank of the United Arab Emirates, which will make payments in dirhams to Iran.
Since July 2011, India had been paying in euros for 55 per cent of its purchases of Iranian oil through Ankara-based Halkbank. The remaining 45 per cent was remitted in rupees through UCO Bank.

The euro payments ceased from February 6, 2013, but the portion of rupee payments continued through Uco Bank.