Indian Refiners to Pay Second $700 Million Instalment in Outstanding Iran Oil Dues

The second instalment is said to be part of a $1.4 billion payment to Iran by Indian refiners.

Indian refiners, including Essar Oil (Essar Oil) and Mangalore Refinery and Petrochemicals Limited (MRPL), are set to pay Iran $700 million in outstanding dues for the import of crude oil, the second instalment to date, Platts reports.

It's reported that the second instalment will be paid in rupees to the Reserve Bank of India, where the sum will then be forwarded on to Iran.

Essar Oil is said to have paid $335 million on September 30 through UCO Bank, an Indian public bank.

"As of now $1.4 billion has been cleared; $700 million has been paid and $700 million has been acquired... so there will be no impact on the [currency] market," explained HR Khan, Deputy Governor of the Reserve Bank of India.

Since 2011, India is reported to have paid 45 percent of its crude import dues in rupees to Iran's UCO Bank account, and was set pay the remainder of its crude bill in euros through Turkey-based Halkbank, but 2013 sanctions impeded this process, creating a backlog in the payments.

In September, the U.S. Treasury's Office of Foreign Assets Control approved Indian refineries' payments for $1.4 billion of the $6.5 billion they owed to Iran.

The Press Trust of India is said to have reported that Essar Oil owes Iran $3.34 billion, MRPL owes $2.49 billion, Indian Oil Corporation Limited owes $581 million, Hindustan Mittal Energy Limited (HMEL) owes $97 million, and Hindustan Petroleum Corporation Limited (HPCL) owes $29 million.

In August, speculation that Iran is ready to ramp up oil exports was spurred on by reports that India is ready to pay the Islamic Republic $1.4 billion in backlogged oil dues.