Having batted for greater crude imports from Iran as it would save around $8.5 billion in foreign exchange for India, Petroleum Minister M Veerappa Moily is to visit the Persian Gulf nation soon to bolster the energy ties between the two nations.
Sources pointed out that though no fixed schedule or date has been finalised yet for the visit, the Petroleum Minister is keen on visiting the Islamic nation, considering the fact that shipments from that country have considerably reduced owing to pressure from the US-sponsored sanctions.
Moily recently had said that he plans to visit Iran along with certain other Central Asian nations like Uzbekistan to bolster energy ties with them. As per tentative information, Moily may visit Tehran by next month.
Iran holds significance in the scheme of things of New Delhi, as Moily recently had written to Prime Minister Manmohan Singh suggesting that by increasing crude imports from the Persian Gulf nation, the country’s forex savings would be considerable as unlike imports from other countries India pays Tehran in rupee for crude supplies. This mode of payment helps India in curbing dollar outgo in a significant manner, sources said.
Moreover Moily’s visit is expected to be a reciprocal one, as in May this year, former Iranian Oil Minister Rostam Qassemi had visited New Delhi and during his meeting with his Indian counterpart, had underlined the need for further expansion of mutual cooperation between both the nations in the energy sector.
Significantly both the ministers had at that time agreed that India will continue purchasing oil from Iran.
Despite international sanctions having lessened India’s crude imports from Iran in recent times, state-owned Mangalore Refinery and Petrochemicals ltd (MRPl) has agreed to purchase oil cargoes from the Islamic nation, which according to observers, is being considered as a positive development.
Moily in a recent letter to the Prime Minister had said that about 2 million tonnes crude oil has been imported from Iran so far during the current financial year. An additional import of 11 million tonnes during 2013-14 would result in reduction in forex outflow by $ 8.5 billion (considering the international price of crude oil at $ 105 per barrel).
The Petroleum Minister’s strategy regarding imports from Iran came in the wake of the Prime Minister asking his ministry to narrow down current account deficit (CAD). Moily has been seeking $ 25 billion cut in oil import bill.
Moily in his letter to Singh, had suggested a strategy which could result in a saving of around $ 19-20 billion in the current financial year.
Resumption of crude imports from Iran forms a major part of the revival plan suggested by Moily in his letter. As US and European Union sponsored sanctions have blocked all payment routes, India pays Iran in rupee terms.
Other measures suggested by the Petroleum Minister to the PM included asking state-owned oil firms to keep crude imports at 2012-13 level of 105.96 million tonnes that will save $ 1.76 billion in foreign exchange. Also, a mega fuel conservation campaign to limit fuel consumption growth to last year’s 4.1 per cent will save another $ 2.5 billion, Moily had suggested.