PMO calls meeting to discuss raising oil imports from Iran
With the rising oil import bill casting a shadow on attempts to rein in a record current account deficit, the Prime Minister's Office has called a meeting to discuss raising crude imports from Iran to curtail dollar payouts.
Principal Secretary to Prime Minister Pulok Chatterji has called a meeting this week to discuss measures to reduce oil import bill, official sources said.
The meeting, which is to be attended by Foreign Secretary Sujatha Singh, Oil Secretary Vivek Rae, Commerce Secretary S R Rao and Economic Affairs Secretary Arvind Mayaram, will also discuss issues relating to increase in import of oil from Iran and inventory management.
India, which imported crude oil worth USD 144.3 billion in 2012-13, has already spent USD 47.13 billion on oil imports in first four months of current fiscal.
Sources said the government is mulling asking state-owned firms to keep crude imports at 2012-13 level of 105.96 million tons that will save USD 1.76 billion in foreign exchange.
Also, the government is looking at cutting down the crude inventory they hold from current 7-14 days to just 2-3 days so as to free millions of dollars oil companies keep parked in maintaining stocks.
Also on agenda is increasing crude imports from Iran. Oil Minister M Veerappa Moily believes USD 8.47 billion can be saved in foreign exchange outgo by importing 11 million tonnes of oil from Iran in the remainder of current fiscal as Persian Gulf nation is paid in rupees instead of dollar for oil purchases.
About 2 million tonnes crude oil has been imported from Iran so far during the current financial year.
As US and western sanctions blocked all payment routes, India pays Iran in rupees in a Uco Bank branch in Kolkata.
India, which last fiscal imported 13.1 million tonnes of oil from Iran, has been, since July 2011, paying in euros to clear 55 per cent of its purchases of Iranian oil through Ankara-based Halkbank. The remaining 45 per cent due amount was remitted in rupees in accounts Iranian oil company opened in Kolkata-based Uco Bank.
Payments in euro through Turkey ceased from February 6 this year and now Iran is paid only in rupees. Rupee payment helps save foreign exchange outgo, thereby reducing CAD.
Sources said the meeting is part of government's efforts to prop up the rupee, which has slipped 23 per cent against the US dollar this fiscal.
India had in 2012-13 imported 13.14 million tonnes of crude oil from Iran, down from 18.11 million tonnes of 2011-12. Iran was till 2010-11 India's second largest supplier after Saudi Arabia but has since slipped to the sixth place.