ET reported that a RBI team will visit Germany this week to explore a new conduit for payments towards Iranian crude oil imports.
Mr S Sundareshan oil secretary said that "The RBI team will be meeting Deutsche Bundesbank officials to find an alternative mode of payment."
He added that "There has been no disruption in supplies from Iran since December 23rd 2010 when RBI clamped down on the main conduit Indian companies use to pay for the consignments. Iran has agreed to sell crude oil on credit this month, pending resolution of the deadlock."
He said that Iran is selling crude oil to Indian refiners on open credit after the Reserve Bank of India closed the Asian Clearing Union route, a move that effectively bars settlement in US dollars and the euro. He added that "There is no stoppage of oil supplies. Iran will continue to sell crude based on guarantee from companies to make payments in future. We are hopeful that a specific routing of funds for oil imports from Iran will be finalized in next few days."
India has asked Iran to identify a panel of banks, which are not under US sanctions, to route payments to National Iranian Oil Co. State Bank of India is ready to facilitate payments, but is not willing to deal with any bank on the US sanctions list.
The two nations have so far not been able to find a solution on how New Delhi should pay for oil imports from Iran after India's central bank said on December 23rd 2010 that payments to Iran can no longer be settled using a long standing clearing house system run by regional central banks.
Officials said that SBI has refused to route payments through the Hamburg-based EIH Bank, which Iran had identified as a temporary channel for routing money to NIOC. NIOC has an account in the bank, but SBI felt since the bank is already under US sanctions, its business in America may be affected by dealings with EIH.
Iran is India's second largest supplier of crude oil, after Saudi Arabia. India imports USD 12 billion of crude annually from Iran or about 14%t of its total crude import bill. MRPL buys 7.1 million tonnes of Iranian oil, while IOC and HPCL import three million tonnes each. Private sector Essar Oil imports about 5 million tonnes.
(Sourced from Economic Times)
