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Hit largely by the sanctions are the country’s largest importer of Iranian crude oil, Mangalore Refinery and Petrochemicals (MRPL), a subsidiary of Oil and Natural Gas Corporation (ONGC), and Indian Oil’s (IOC’s) Chennai Petroleum Corporation. Says IOC chairman R S Butola, “Many other refineries (too), including the private sector, are buying Iranian crude. There has been reduction in purchases from Iran but companies are still buying. Last year, too, we were facing difficulties in getting insurance but were able to get it. They (government) are working on that and we are hopeful.”
IOC not only buys crude from Iran but the National Iranian Oil Company has a considerable stake in Chennai Petroleum. A senior Hindustan Petroleum Corporation official said they might have to look for options if reinsurance for refineries does not work out by June. The other countries India is looking at include Saudi Arabia and Kuwait.
A Reuters news agency report of last week raised hopes by quoting a source as saying the government would ensure its refiners have insurance for plants that run crude from Iran. MRPL chairman Sudhir Vasudeva also recently told journalists he hoped the issue would be solved soon. Its import of Iranian crude is down 39 per cent from 6.2 million tonnes in 2011-12 to 3.8 mt this financial year.
The government is yet to issue a clear guidance on payment issues. After the US sanctions, companies in India have to go for full payment in rupees through UCO Bank. “We are yet to get a clear guidance on this. We are ready to take payment in Indian rupees. Whether it would be transferred or exchanged for export of goods to that country following the sanctions is not our business. We have not got any instructions,” said a senior UCO Bank official.
