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‘Iran unable to get oil dues from India’

8 March 2016 22:35



Iran on Tuesday indicated frustration with India’s failure to settle debts remaining from previous purchases of oil from Tehran. 

Iran’s First Vice President Es’haq Jahangiri said India has announced that its banks are too afraid from US punitive actions to proceed with paying Iran’s dues while many global financial institutions have already resumed working with Iran after the removal of the sanctions.

“Even though the sanctions have been lifted, we have not been able to retrieve our cash from India,” said Iran’s First Vice President Es’haq Jahangiri.

“India’s officials say the country’s banks are afraid of the US.”

Jahangiri’s comments follow indications that recently appeared in Indian media that suggested Tehran and New Delhi have hit a roadblock over settling some $6 billion in oil dues.

India’s Business Standard reported on Sunday that Gholamali Kamyab, the vice governor of the Central Bank of Iran (CBI), will travel to India later this month to discuss differences with officials in New Delhi over a mechanism to get Iran’s oil money back from the country.

The difference reportedly involves the foreign exchange rate for the sum that India owes Iran.

Iran sold oil to India’s refiners like Essar Oil and Mangalore Refinery and Petrochemicals Ltd (MRPL) in US dollar per barrel. Around 45 percent of the oil bill was paid in rupees in a UCO Bank account while the rest 55 percent was to be cleared whenever banking channels open with the removal of the anti-Iran sanctions, reported the Business Standard.

Rupee to a US dollar was under 55 in February 2013 when the 45:55 payment system became operational. Rupee to a US dollar is at 67 now.

The Business Standard further quoted sources as saying that Iran wants its dollar dues in full without factoring in the exchange rate.

Refiners like Essar Oil on the other hand want to pay rupee equivalent of the purchase at current rate.

Tehran has told India that the three-year old mechanism of paying 45% of oil import bill in rupees and keeping the remaining 55% pending for payment channels to clear, has come to an end.

It will be opening or re-activating euro accounts with Indian banks and would like to have the past money transferred from refiners into these accounts.

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