Minister: India Pays First Tranche of Iran Oil Debts

TEHRAN (FNA)- Indian Finance Minister Pranab Mukherjee announced that the Indian firms have paid the first installment of their Iran oil debts as money owed on shipments of 400,000 barrels per day had risen to nearly $5 billion.
India and Iran have resolved their problem over payments, Mukherjee was quoted by Hindustantimes as saying.

Iran halted oil supplies to India on August 1 due to continued overdue payments.

Yet, the source said, an Indian refinery is trying to clear its debts to Iran and Iran may continue selling oil to the refinery.

Since December, India and Iran have been struggling to find ways for New Delhi to pay for imports of 400,000 barrels per day, 12 percent of its oil demand, after the Reserve Bank of India halted a clearing mechanism under US pressure.

Earlier reports said that Indian refiners such as Mangalore Refinery and Petrochemicals (MRPL) have opened rupee accounts in the New Delhi branch of Union Bank of India, which will route euro payments to state-owned Turkiye Halk Bankasi (Halkbank) in Istanbul.

Halkbank will then transfer that money to the account of NIOC, sources involved in the process said.

MRPL and private sector refiner Essar Oil earlier this month transferred a small payment to Halkbank to test the conduit, which will be used to clear over $7 billion in outstanding dues to Iran that have accumulated.

Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation (HPCL) will make payments next once the test payments are successful.

India is Iran's second-biggest customer after China and Iran provides 12% of the Asian country's oil demand.