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India has started clearing the dues of National Iranian Oil Company (NIOC) for import of crude oil from Iran.
The Minister of Petroleum and Natural Gas, Mr S. Jaipal Reddy, informed the Lok Sabha here on Thursday that as of March 1, 2011, payment of €1.5 billion has been made to the Central Bank of Iran.
After the withdrawal of the Asian Clearing Union (ACU) mechanism by the Reserve Bank of India (RBI) with effect from December 23, 2010, all payments to Iran for import of crude oil have to be settled in any permitted currency outside this mechanism. The payments to NIOC up to December 22, 2010, were made through the ACU mechanism.
To work out the payment modalities, a high-level Indian delegation had met the Iranian officials. The oil companies — Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd, Mangalore Refinery and Petrochemicals Ltd and Essar Oil Limited — enter into term contracts with the NIOC for crude oil imports.
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