India to pay another $700 million to Iran on October 12

[Hindustani78]

By PTI | 4 Oct, 2015, 11.23AM IST
India to pay another $700 million to Iran on October 12 - The Economic Times

NEW DELHI: India on October 12 will pay another USD 700 million to Iran to clear part of past oil dues, the second payment since the Persian Gulf nation reached a historic nuclear deal with western powers.

Essar Oil, Mangalore Refinery and Petrochemicals Ltd (MRPL), Indian Oil Corp (IOC) and Hindustan PetroleumBSE 0.06 % Corp (HPCL) had on September 30 paid the first tranche of USD 700 million to clear a chunk of the USD 6.5 billion they owe to Iran for past oil purchases.

A second tranche is scheduled to be paid on October 12, officials at the refiners said.

Iran had in July reached an accord with the US and five other world powers to restrict its nuclear programme in exchange of easing of sanctions, which had crippled its oil economy.


The sanctions are expected to end in 2016 if Tehran complies with terms of the deal agreed on July 14.

As part of the deal, the US Treasury's Office of Foreign Assets Control (OFAC) had approved the banking mechanism for payment of USD 1.4 billion by Indian refiners in two equal installments to Tehran.

On September 30, Essar Oil had paid USD 335 million, MRPL USD 300 million, IOCBSE -0.24 % USD 62 million and HPCLBSE 0.06 % USD 3 million, officials said adding that the refiners deposited rupee equivalent of USD 700 million in the Kolkata-based UCO Bank.

UCO Bank purchased dollars for onward transmission to Iran.


The remaining USD 4 billion will be cleared in tranches after payment channels are okayed.

The dues to Iran on crude oil that refiners buy have accumulated as western sanctions blocked payment routes since 2013.

About 45 per cent of the oil import bill is paid in rupees in the UCO Bank branch and the rest has added up.

Since February 2013, refiners like MRPL and Essar Oil have been paying 45 per cent of dues on purchase of crude oil from Iran in rupees through UCO Bank, Kolkata.

The remaining has been accumulating, pending finalisation of a payment route and mechanism. They had last year paid nearly USD 3 billion in six instalments through a limited payment channel following start of nuclear talks between the West and Iran.

Before the September 30 payment, Essar Oil owed USD 3.34 billion to Iran, MRPL USD 2.49 billion and Indian Oil Corp USD 581 million. HMEL owed USD 97 million and HPCL another USD 29 million.

Besides, about Rs 17,000 crore was lying in Iranian account with UCO Bank.

 

[The Ultranationalist]

good, pay our iraninan friends whatever is due to them.

 

[Providence]

India is clearing cheques as if the money would disappear tomm... The interest is that penalising is it ?

 

[Spectre]

India is clearing cheques as if the money would disappear tomm... The interest is that penalising is it ?

Not sure that interest has accrued, as far as I am aware payment was stalled as all the payment mechanisms were blocked. All Indian importer entities have been depositing money with state run institution (UCO Bank?) as each transactions occurred and Govt operated the credit account where in Iranian imports were sent free in lieu of their credit balance with GoI and GoI released funds to Indian exporters

 

[Tridibans]

India is clearing cheques as if the money would disappear tomm... The interest is that penalising is it ?

Yes. You see we are shrinking by 7.5% of our GDP per year. Add to it, in the next few years our economy will collapse from 45 odd or so to 60 odd.... and did I mention that our foreign reserves are at an all time low

 

[Spectre]

Not sure, interest has been accrued, as far as I am aware payment was stalled as all the payment mechanisms were blocked. All Indian importer firms have been depositing money with state run institution as each transaction occurred and Govt operated the credit account where in Iranian imports were sent free in lieu of their credit balance with GoI and GoI released funds to Indian exporters

The only issue was hedging as Indian rupee has fallen in value @Providence

 

[Providence]

The only issue was hedging as Indian rupee has fallen in value @Providence

I am not sure if you were there but in several threads I did predict ( hypothesised to be more precise ) that Rupee value would touch 67 in next 6 months. All i faced was random comments from hyper nationalists

P.S even suggested some put options. I suppose this was a wrong avenue

P.P.S not related to the thread

 

[Spectre]

I am not sure if you were there but in several threads I did predict ( hypothesised to be more precise ) that Rupee value would touch 67 in next 6 months. All i faced was random comments from hyper nationalists

P.S even suggested some put options. I suppose this was a wrong avenue

P.P.S not related to the thread

Lol, everyone knew about it - once the rupee broke the support at 58 then at 60 that it would settle down at 66-67 with lows touching 68. Rather than options I would suggest forwards as Indian Option Markets are not mature and there are lot of defaults.

I earned a nice tidy sum

 

[Hindustani78]

The only issue was hedging as Indian rupee has fallen in value @Providence

Rupee extends gains against dollar for fourth day - The Hindu
Mumbai, October 1, 2015

The rupee extended gains for the fourth straight day against the U.S. currency on Thursday, advancing by 7 paise to close at 65.51 per dollar on selling of dollar by banks and exporters on hopes of more foreign capital inflows into equity market.

The rupee resumed steady at 65.58 per dollar at the Interbank Foreign Exchange (Forex) market in view of cautious approach. It moved in a range of 65.48 per dollar and 65.67 per dollar before ending at 65.51 per dollar, showing a gain of seven paise or 0.11 per cent.

It has gained 65 paise or 0.98 per cent in the last four sessions. The dollar index was trading higher by 0.11 per cent against a basket of six currencies in late afternoon trade.

 

[Hindustani78]

IOC’s first purchase of Iranian crude in four months helped lift imports of the oil to 2,33,200 bpd in September compared with 1,98,800 bpd in August

Updated: October 6, 2015 22:59 IST
India imports 17% more Iran oil in September than in August - The Hindu
India imported 17.3 per cent more crude oil from Iran last month than it did in August as its top refiner made its first buy from Tehran for a new plant, according to ship tracking data and a report compiled by Thomson Reuters Oil Research and Forecasts.

Indian Oil Corp, India’s biggest refiner, accounted for most of September’s rise from the previous month, taking a very large crude carrier carrying two million barrels of oil for its recently commissioned 3 lakh barrel-per-day (bpd) Paradip Refinery on the nation’s east coast, the data showed.

IOC’s first purchase of Iranian crude in four months helped lift imports of the oil to 2.33 lakh bpd in September compared with 1.99 lakh bpd in August, the tanker arrival data showed. The September intake was down 3.4 per cent from a year ago.

IOC is not a regular buyer of the crude as its term contract with the Islamic republic averages only about 25,000 bpd. Still, the world’s fourth-biggest oil consumer and Iran’s top client after China, bought 19.3 per cent less oil in January-September at about 2.16 lakh bpd, the data showed.

India’s imports from Iran in the first nine months of the year were dragged down by deep cuts in shipments by New Delhi in the first quarter of 2015, under pressure from the U.S. to keep its imports within the limits of sanctions targeting Tehran’s disputed nuclear programme.

In the first half of India’s fiscal year, running over the six months April-September, its oil imports from Iran jumped 16.7 per cent as refiners stepped up purchases following the July deal that may mean the removal of sanctions sometime next year.

Three Indian refiners, Mangalore Refinery and Petrochemicals, Essar Oil and IOC together imported 2.61 lakh bpd in the first six months of this fiscal year compared with 2.23 lakh bpd a year ago, the data showed.

India’s imports of Iranian crude in September were largely as expected based on revised tanker loading schedules for the month that excluded shipments of condensate, according to a source with knowledge of Iran’s shipping plans.

Iran’s overall crude oil sales look to be headed towards a seven-month low in October, down 14 per cent from September, according to preliminary tanker loading data.