India to back up insurance for refiners processing Iranian crude

India to back up insurance for refiners processing Iranian crude

India will provide a 10 billion rupee ($158 million) sovereign guarantee to back local insurance for refineries using Iranian oil, two government sources said, as it tries to boost imports paid for in local currency to ease pressure on the rupee, Reuters reported.

India's crude imports from Iran slumped 75 percent in July from June to just 35,500 barrels per day (bpd) because of problems over insurance for crude from Iran caused by western sanctions which aim to curb its nuclear ambitions.

But with oil imports in dollars swelling India's current account deficit to a record in 2012/13, the government is trying to maximise purchases from Iran, which is now accepting rupees as its hard currency options are curtailed.

The rupee sank to a record low against the dollar last month and is now languishing around 63 to the dollar, swelling the import bill, pushing up inflation and straining public finances.

"It was finalised yesterday in a meeting with the petroleum secretary. An energy pool will be set up with a sovereign guarantee," one of the sources, both of whom have direct knowledge of the matter, said.

India had originally been considering a sovereign guarantee of 20 billion rupees to back the local insurance. It was not immediately clear why the government had decided to halve the amount or whether it would be sufficient for insurers.

The maximum claim that has arisen so far in the Indian refining sector is 5 billion rupees.

"The issue has been resolved. GIC (local reinsurer General Insurance Corp) will manage the pool. In case there is any mishap or something, then they will pay," the second source said.

The sources said apart from the 10 billion rupees sovereign backing, GIC and oil companies will provide 5 billion rupees each to the pool.

The government is taking a range of measures to cut its import bill including raising duty on gold shipments to a record 10 percent and making airline passengers pay duty on imports of flat-screen televisions, but oil is still about 34 percent of the total import bill.

India's oil minister Veerappa Moily is targeting raising imports from Iran to around 260,000 bpd, aiming to save about $8.5 billion from the oil bill which totalled $144 billion last year. In total, Moily wants to save $22 billion this year.

That level of imports from Iran would be only about 6,000 bpd lower than the average for fiscal 2012/2013 and would virtually wipe out cuts by India that won it a waiver from Washington's sanctions.

"We pay Iran in rupees, so the more we import from Iran the better it is," the first source said.

India, together with Iran's other major clients China, Japan and South Korea, had won a waiver from U.S. sanctions after cutting back on its imports, which fell 46 percent in the first seven months of the year to about 185,700 bpd.

Indian refiner Mangalore Refinery and Petrochemicals Ltd resumed imports from Iran in August after it secured local reinsurance for claims up to 5 billion rupees. MRPL, once Iran's biggest Indian client, halted imports in April due to lack of insurance cover.

The sovereign guarantee "will essentially provide comfort to the insurance companies to the extent that they will provide cover without going to reinsurers abroad," MRPL's managing director P.P. Upadhya told Reuters.

"There will be no change in our strategy to buy Iranian oil," he added.

India had been depending on European markets to hedge its risk but European reinsurers have added a clause in contracts with Indian firms that meant claims arising during processing of Iranian oil would not be met, because of sanctions.

With the start of this re-insurance cover local insurers will delete the sanctions clause from the existing annual policy of Indian refiners processing Iranian oil, two oil industry sources told Reuters. ($1 = 63.2300 Indian rupees).

Esper: U.S. will cut troop levels in Afghanistan to 'less than 5,000'
Esper: U.S. will cut troop levels in Afghanistan to 'less than 5,000'
Ukraine president says Kyiv staying out of U.S. internal politics, elections
Ukraine president says Kyiv staying out of U.S. internal politics, elections
U.S. sets record as coronavirus cases top 5 million
U.S. sets record as coronavirus cases top 5 million
Loading Bars
Azerbaijan launches tobacco drying enterprise in Tovuz district (FOTO)
Iran declares amount of investment in Bushehr port
Iran reveals its COVID-19 data for August 9
Azerbaijan reports 308 new COVID-19 recoveries
Samsung remains most-used mobile device in Azerbaijan
Iran's Shahid Salimi TPP boosts its production
US expert: Development of Amulsar mine causes tremendous pollution of fresh-water resources in Caucasus
Turkey reports 1,172 new COVID-19 cases
Georgia reports 9 new cases of COVID-19, 4 recoveries
COVID-19-like pneumonia affected over 1,000 more Kazakhstanis, killing 15
Turnout at Belarus presidential election reaches 45.33%
Iran discloses volume of wheat purchased in Ardabil Province
Azerbaijani government to support entrepreneurs in digital infrastructure dev't
Iran reveals value of exports via Kermanshah Province to Iraq
Special Forces Units also involved in first stage of Azerbaijani-Turkish tactical exercises (PHOTO/VIDEO)
Saffron to be auctioned in Iran
Azerbaijan reveals daily crude oil production for July 2020
Early voting turnout at 41.7% in Belarus
Iranian currency rates for August 9
Polling stations at Belarus presidential election open at 8:00
Armenia violates ceasefire with Azerbaijan 28 times
Export of steel from Turkey abroad in 1H2020 shrinks
Geostat reveals inflation rates in Georgia in June 2020
South Africa's COVID-19 death toll exceeds 10,000
EU Ambassador: Uzbekistan is one of key countries in Europe-Asia Connectivity Strategy
New COVID-19 cases detected in Kazakhstan in past day
Esper: U.S. will cut troop levels in Afghanistan to 'less than 5,000'
Law enforcers regain control of Beirut’s center, ministries captured by protesters
Chinese mainland reports 23 new confirmed COVID-19 cases
Ukraine president says Kyiv staying out of U.S. internal politics, elections
U.S. sets record as coronavirus cases top 5 million
Twitter, TikTok held preliminary talks about potential combination: WSJ
Brazil surpasses 100,000 deaths, 3 mln cases of COVID-19
Trump signs orders to extend certain COVID-19 relief after Congress fails to reach deal
Turkey reports 1,172 new COVID-19 cases, 239,622 in total
Czech apartment fire kills 11, including three children
Moscow's death toll from confirmed coronavirus cases rises by 12 to 4,572 - crisis center
WHO reports one-day surge in coronavirus cases by over 284,000
Plane crashes in Portuguese-Spanish joint fire operation, one killed
Lebanese PM says only way out of crisis is holding early elections: statement
Over 230 injured in Beirut protests - Lebanese Red Cross Society
Ireland reports highest number of new COVID-19 cases since early May
Beirut explosion death toll rises to 158, over 6,000 injured: Health ministry
Android goes on being most popular operation system in Azerbaijan
Turkey records decline in carpet export in 1H2020
Official: Epidemiological situation in Georgia is manageable and under control
Iranian mayors express readiness to help Beirut after blast
Kazakhstan sends military medical team to Lebanon after Beirut blast
Protesters storm Lebanon's Foreign Ministry
Oil spill threatens ecological disaster as Mauritius declares emergency
Belarus reports 124 new COVID-19 cases, total reaches 68,738
Azerbaijani president congratulates president of Singapore
Azerbaijani MFA: Armenia is making attempts to illegally resettle Armenians from Middle East to Azerbaijan's Nagorno-Karabakh and adjacent regions
Iran declares amount of funds to be paid for construction of Ardabil-Mianeh railway
Iran Red Crescent delivers 15 tons of food to Lebanon Red Cross
Turkey to allocate Port of Mersin for Beirut's use, top Turkish official says
PM Gakharia: Georgia ready for NATO membership
Libya reports 200 new COVID-19 cases
Weekly review of Azerbaijani currency market (Aug. 3-7)
Iran announces balance of bank loans
Total COVID-19 recoveries number exceeds 30,000 in Azerbaijan
Uzbekistan's capital to establish co-op with Japan's Nagoya city
Georgia becomes net importer of apples in 2019/2020 season
Iran's parliament to review stock exchange, foreign currency rates
Ferrero to purchase hazelnuts from Georgian Hazelnut Producers Association
Number of trucks under repair in Iran announced
Weekly review of Azerbaijan's precious metals market (July 31-August 7)
Uzbekistan drills new well at gas field in country's Bukhara region
Turkmengas announces tender for purchase of electrical equipment
Turkmenistan’s Oil Refineries Complex opens tender for gasoline purchase
Kazakhstan, Switzerland trade turnover plummets during COVID-19
Azerbaijan's fund reveals amount of compensations paid to depositors of liquidated banks
Transit-oriented development centers to be established in Iran
France becomes main supplier of natural butter to Uzbekistan
Gasification of new settlements carried out in Turkmenistan's Lebap region
Assistant to president: Establishing of Azerbaijan Investment Holding - big step
Azerbaijani oil prices down
Nokia's new CEO working on setting strategy in 'dream job'
Current epidemiological situation not safe enough for weddings - assistant to president
Ministry: Georgia sees increase in export price of blueberries
Iran reveals number of enterprises to commission in Bushehr Province
TABIB: Visits of foreign doctors to Azerbaijan arranged on basis of interstate agreements
Turkmenistan reconstructs gas supply system in country's Mary region
Iran reveals its COVID-19 data for August 8
Uzbekistan increases butter production
Flights to resume to more destinations - assistant to Azerbaijan's president
Iran's National Petrochemical Company talks increasing propylene production
Turkmenistan, Germany to continue co-op within international organizations
Iran discloses exports from Sistan and Baluchestan Province
Huge volumes of investments withdrawn from Iranian economy
Azerbaijani government takes measures to revive business - deputy economy minister
Assistant to president: Reopening of restaurants in outdoor areas in Azerbaijan discussed
Iran's gasoline consumption declines amid coronavirus spread
Uzbekistan, Oman to expand cooperation in logistics
Azerbaijani association talks impact of COVID-19 pandemic on real estate insurance market
Assistant to Azerbaijan's president: Non-grocery stores to open, other restrictions eased
We all tired of quarantine, it's kind of torment - assistant to president
Turkmenistan, WHO discuss measures to combat coronavirus
Capital of Azerbaijani investment company Uni Capital significantly grows
Azerbaijan’s BTB Bank increases assets
All news