Published on : Jul 23, 2015
To discuss how the oil import dues will be paid, top financial officials from India are going to visit Iran, after Tehran was being blocked of banking channels by world powers to hold back the nuclear programme of the country. World powers have stated that unless the country takes a restricting action on its nuclear programme, the sanctions will not be lifted.
India’s Finance Secretary Rajiv Mehrishi will lead a group of officials from the Reserve Bank of India, the state owned bank UCO Bank and oil companies of the country and visit Iran from July 25 to July 26.
India is the world’s fourth largest consumer of oil and has an unpaid bill of nearly US$6.5 billion for Iranian oil. India was unable to pay the bills as most of the banking channels were blocked.
According to recent the agreement of July 14, sanctions to Iran will be given back gradually if the country makes good on commitments that will make it hard for the company to build a nuclear weapon. Failure to do so will bring back the sanctions in force.
Since this accord, India’s refineries had to hold fifty five per cent of the payments due for the Iranian oil since February 2013. The remaining forty five per cent of payment was settled through UCO bank, which could be drawn by Iran for buying essential entities such as medicines and food.
It is being said that Iran is expected to gain payments for its imports to Indian refineries in stages and not all at once. Also, Iran is to soon begin discussion about how the billions of dollars worth dues pending with Indian refineries can be recovered through a suitable mechanism.
Records say that Mangalore Refinery and Petrochemicals Ltd owes Iran US$2.49 billion, Essar Oil owes US$3.34 billion, and Indian Oil Corp owes Iran $581 million. HPCL-Mittal Energy Ltd has to pay Iran US$97 million and Hindustan Petroleum Corp an amount of US$29 million.