Iran Economy NewsIndia pays $2 billion to clear Iran oil import...

India pays $2 billion to clear Iran oil import dues

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Reuters: India has paid 1.5 billion euros ($2.08 billion) to clear pending dues for oil imports from Iran, the country’s oil minister said, over three months after the Reserve Bank of India ended a long-standing clearing house system.

NEW DELHI (Reuters) – India has paid 1.5 billion euros ($2.08 billion) to clear pending dues for oil imports from Iran, the country’s oil minister said, over three months after the Reserve Bank of India ended a long-standing clearing house system.

“Pending dues of National Iranian Oil Company (NIOC) are now being cleared and as of March 1, 2011, payment of Euro 1.5 billion has been made to the Central Bank of Iran,” S. Jaipal Reddy told lawmakers in a written reply on Thursday.

The minister did not specify if the payments were made using a proposed new mechanism involving State Bank of India and German-based European-Iranian Trade Bank AG (EIH).

“Consequent to the withdrawal of the Asian Clearing Union mechanism by the RBI with effect from December 23, 2010, all payments to Iran for the import of crude oil have to be settled in any permitted currency outside the ACU mechanism,” he said.

However an industry source said that payment have been cleared due to direct involvement of RBI and Germany’s central bank, the Bundesbank.

“Oil companies have provided certificates and details of their oil transactions until end-December. The new mechanism will be applicable to transactions done from January,” the source, who is not authorised to speak to the media, said.

Iran is India’s second-biggest oil supplier after Saudi Arabia and has not stopped shipping oil to India despite the scrapping of payments through the Asian Clearing Union (ACU).

Oil deals with Iran — worth about $12 billion a year — run from April to March.

The two nations have yet to finalise a solution on how to pay for oil outside the ACU.

Reddy said India imported 424,000 barrels per day (bpd) of oil from Iran in 2009/10 and about 178,000 bpd during April-September.

(Reporting by Nidhi Verma, Editing by Jo Winterbottom)

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