India pays second tranche of outstanding oil dues to Iran

Indian refineries have paid a second installment of USD 700 million to Iran as partial settlement of outstanding oil dues to the Islamic Republic.

According to two Indian oil industry sources, who spoke on condition of anonymity, the payment follows a July agreement between Iran and the P5+1 group of countries – the US, the UK, France, China, Russia and Germany – based on which, sanctions on Iran’s economic sectors will be lifted in return of certain limitations on Tehran’s nuclear program.

Last month, India paid a similar amount to Iran, which was the first case of releasing Iran’s funds after the country asked India in August to release USD 1.4 billion in oil dues in two equal installments, Reuters reported.

According to Reuter’s report, Essar Oil on Tuesday paid about USD 338 million, followed by about USD 299 million from Mangalore Refinery and Petrochemicals Ltd, the sources noted, adding that Indian Oil Corp paid about USD 60 million and Hindustan Petroleum Corp about USD 3 million.

According to the same sources, Indian refiners owed about USD 6 billion to Iran by the end of September with Essar owing about USD 2.9 billion, MRPL about USD 2.5 billion, and IOC owing USD 500 million. HPCL-Mittal Energy Ltd also owed USD 97 million while HPCL had to pay USD 26 million.

Indian refiners have been depositing 45 percent of their oil payments to Iran in rupees with UCO Bank since 2012. Tehran uses the funds, which currently amount to more than 170 billion rupees (USD 2.6 billion), to import goods from New Delhi.

However, in 2013 and under pressure from sanctions, Indian refiners were forced to hold the remainder of the money after a route used to pay Iran through Turkey’s Halkbank was blocked.

Tehran is currently India’s seventh-biggest supplier of crude oil, though the country ranked the second in this regard before imposition of sanctions.

By Press TV