Indian refiners with outstanding dues for the import of crude oil from Iran are set to make their second tranche of payments, pegged at the rupee equivalent of $700 million, on Tuesday, two oil industry sources said Monday.
The payments by Essar Oil and Mangalore Refinery & Petrochemicals Ltd, two of India's biggest importers of Iranian oil, would be similar to the amounts they paid in the first tranche on September 30, sources said.
Essar Oil paid $335 million in its first instalment, one source said.
The US Treasury's Office of Foreign Assets Control granted approval in September for Indian refineries to pay $1.4 billion of the $6.5 billion they owed in past oil dues to Iran.
The second tranche of payments is being made to the government in Indian rupees and the Reserve Bank of India will then arrange for its onward remittance to Iran, one source said. The first tranche was routed via India's state-owned UCO 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," Reserve Bank of India deputy governor HR Khan was quoted as saying on the sidelines of a financial industry event last week.
India has paid 45% of its crude import bill in rupees to Iran's account with Kolkata-based UCO Bank since mid-2011. The remaining 55% was being routed through Turkey's Halkbank in euros, but this was halted in 2013 under the pressure of sanctions, creating a payments backlog.
According to an earlier report by the Press Trust of India, Essar Oil owes Iran $3.34 billion, MRPL $2.49 billion, Indian Oil Corp. $581 million, HMEL $97 million and HPCL $29 million.
