The Government has decided to allow public sector oil companies to import crude oil from Iran by Iranian tankers for a period of six months from July 1.
This follows the representation made by the Petroleum Ministry following the European insures’ decision to deny cover to vessels carrying Iranian cargo from next month.
Indian tankers are insured with the European protection and indemnity (P&I) clubs and therefore they will not be able to carry Iranian crude oil from July 1, unless they are able to get alternative insurance cover.
A Shipping Ministry official confirmed that local refiners are allowed to import oil from Iran on c.i.f. basis for six months or till the European Union lifts its sanctions against Iran. This means Iranian supplier of oil will arrange for shipments and insurance of cargo.
India has been importing oil on f.o.b. basis, which means oil companies have been making the shipping arrangements and Indian flag tankers get the cargo preference.
With oil companies going for c.i.f. purchase, local shipping companies will lose Iranian cargo.
“This is not the right move,” said Mr K.M. Sheth of Great Eastern Shipping Company. Why can the Government not offer sovereign guarantee for ships carrying Iranian crude oil? Countries like Japan and China decided to support their ships.”
Great Eastern Shipping Company has a contract from MRPL to carry five million tonnes of crude oil from Iran this fiscal.