The lifting of US and European Union sanctions on Iran will help India by providing access to hydrocarbons at a cheaper rate,, industry chamber CII has said.
“The re-entry of Iran in the market will help Indian refiners boost their margins and the removal of sanctions would allow India to freely buy crude oil from Iran, resulting in lower shipping costs from reduced transportation times,” the chamber said in a statement. CII’s analysis also said that the lifting of sanctions would mean Mangalore Refinery and Petrochemicals Ltd and Aban Offshore could resume their business with Iran while ONGC could make a headway and push for development rights of the Farzad B gasfield.
“Other Indian companies will get a new avenue for exploration and production activities and can explore investment opportunities for building refineries in Iran and help the country’s lagging refinery sector,” CII added.
The industry chamber also added that logistics costs for transporting hydrocarbons can also come down. It said that under the new proposal for development of the Chabahar port in Iran, India could help build the second and third terminal of the port as well as railway connections into the rest of the country. “Another development could be the revival of the decade-old discussions around an Iran-Pakistan-India (IPI) gas pipeline,” CII said.
A PTI report adds: Iran has asked India to pay within two months $6.5 billion in past oil dues, partly in rupees and rest in dollars or euros, a top official said. “The payment will be in at least three instalments. The modalities of instalments and the route are being worked out,” he said.
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 a UCO Bank branch and the rest has accumulated.
The official said the payment to Iran can be either through RBI — in that case refiners will hand over the money to the central bank which will then do the onward transmission to Iran — or through a gateway notified by the government