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The petroleum and natural gas ministry said today that it is not going to stop imports from Iran completely, while there are plans to set up a special fund to provide insurance to refineries.
Interacting with the media, Oil minister M Veerappa Moily said that the government will not cut down the entire imports from Iran. “These are strategic calls to be taken and we will not cut down imports completely. We will sort out the problems faced by Indian refiners soon,” he said.
Meanwhile, Petroleum secretary Vivek Rae said that government is mulling the option to set up a separate fund to provide insurance, in case the European re-insurers refuse to cover Indian refineries that are using Iran crude.
“The fund will have contributions from the national insurance companies as well as the industry players and also the Oil India Development Board. The details of this fund will have to be decided,” Rae added. The petroleum ministry is in consultation with various other stake holders and ministries regarding this and the Department of Financial Services is working on it.
Following the fresh sanctions imposed by the US, foreign subsidiaries of US companies dealing with Iran and also allowed its financial institutions to freeze Iranian assets. Importing countries would also have to go for payment on exchange of goods only and also on local currency too. Before the fresh sanctions India was routing 55 per cent of its payment for the National Iranian Oil Company (NIOC) through the Turkish Halk Bank and the rest through Kolkata-based UCO Bank.
“We have no other option but to pay in Indian rupees. This would happen only if imports happen as we have to sort out the reinsurance issue,” Rae said. Indian insurance were hesitant to give insurance to refineries as European companies were not ready to reinsure it. “Re-insurance contributes 90 per cent of the insurance cover provided by Indian companies,” Rae added.
