IOC says to make small Iran oil payment soon

IOC says to make small Iran oil payment soon

New Delhi: Indian Oil Corp (IOC) will make a payment to Iran for oil soon, the state-run refiner’s chairman R.S. Butola said on Thursday, after a new mechanism was set up to end a seven-month impasse triggered by U.S. pressure.

“We will shortly make a small payment ... hopefully, this month," Butola told journalists at a conference.

Iran has started receiving long-overdue payments from Indian refiners for about 400,000 barrels per day (bpd) of crude through a Turkish bank to get around US-led moves to isolate the Islamic Republic.

IOC imports around 30,000 bpd from Iran, whose other Indian clients are Mangalore Refinery and Petrochemicals Ltd , Essar Oil , Bharat Petroleum and Hindustan Petroleum .

Butola also said IOC’s current daily revenue loss on sales of fuels in the domestic market at state-capped prices was 120 crore ($27.08 million) and that it would get 8,200 crore in compensation from the government for the April to June quarter.

State-run IOC, together with Hindustan Petroleum and Bharat Petroleum are allowed to fix domestic petrol prices, but federal government caps the prices of diesel and kitchen fuels to protect the poor and tame stubbornly high inflation.

India’s food price index rose 8.04% and the fuel price index climbed 12.12% in the year to 23 July, government data on Thursday showed.

Earlier oil minister S. Jaipal Reddy had said state-run fuel retailers’ revenue loss on sale of subsidised fuels — diesel, kerosene, and cooking gas — were seen at 1.22 rupees in the current fiscal year ending 31 March, 2012.