Concerned over future of oil and gas supplies from Iran as growing pressure of US and European Union (EU) sanctions along with threats by insurance companies have put shipments from the Persian Gulf nation under a cloud, the PMO has called an urgent meeting of top Petroleum, Fertiliser, Finance and Ministry of External Affairs (MEA) officials on April 15 to consider steps for countering the possible shortage of the essential fuels in future.
According to highly placed official sources, the meeting has been called by Prinicipal Secretary in the PMO Pulok Chatterji next Monday to find a way out in case supplies of oil and gas become dearer from Tehran in what seems the near future. Secretaries of Petroleum Ministry (as well as ONGC officials), Fertiliser Ministry, as well as senior officials of Finance Ministry and MEA are to participate in the meeting, which is going to be a brainstorming session for discussing a possible "middle path" out of the impending crisis, they added.
As per the information available with The Pioneer, the meeting is to focus on re-insurance of domestic refineries, especially after the panic button pressed by refiners like Mangalore Refinery and Petrochemicals ltd (MRPl, whose refineries process crude from Iran), indicating that they may have to stop imports from the Islamic nation as they had received uncertain signals from insurance companies on extending covers to their refineries.
Incidentally Indian insurance companies had sent out distress signals to domestic refiners amid pressure from reinsurance companies in the US and Europe.
Though the Government has all along maintained that sanctions imposed by the US and EU on Iran curbing its crude exports don't apply on India at all, official sources have indicated to The Pioneer that despite there being "no cause of alarm", New Delhi is "mulling over" the issue of insurance cover on domestic refineries by keeping a close watch on the developments.
It is in this light that the April 15 meeting called by Chatterji assumes significance, as any decision taken in it is likely to define New Delhi's way forward on the issue. At the same time, despite the Government's assertion about sanctions on Iran not affecting India, the "middle path" seems to be a prudent option in the present scenario considering New Delhi shares good equation with both Tehran as well as Washington.
In addition to the reinsurance issue, sources informed that the meeting is also likely to discuss sourcing of gas on concessional rates from Iran considering that Tehran cannot afford to bargain on gas prices owing to the tight spot it is in.
Also the officials would review oil supplies from that country, especially in the light of the fact that ever since sanctions have been imposed on Tehran, not its crude imports have reduced, even its crude production fell by 50 per cent in 2012 over the corresponding year. And as India is in the process of building up its strategic oil reserves, the meeting may take a call on how and from where it can sources crude to stack up those reserves, sources said.
Analysts though on their part feel that India should not unduly feel perturbed about what has been happening in Iran, considering the fact that nations like Saudi Arabia and Nigeria have always been keen on filling in the gap.
"Nations importing crude from Iran always factor in these aspects (the crisis in Tehran), and therefore there are always back-up nations which are ready to step in to fill the gap. India therefore can always rely on crude supplies from nations like Saudi Arabia and Nigeria," said Senior Director with Deloitte Touche Tohmatsu India, Debasish Mishra.
Industry sources said that countries like back-up reserves maintained by countries like Saudi Arabia are enough to fulfill needs of buyers like India, whose requirement is anyway not that much.
However the Government on its part does not seem to be in a mood to leave anything on chance and therefore the next week's meeting is more likely on the lines of maintaining a pragmatic approach keeping in mind the ongoing crisis in Iran, which has only deepened since February this year, when Washington tightened the screws on the Islamic nation further by forcing buyers like India not to make payments for Iran's crude in either euro or US dollar, thus forcing them to make payments in their respective currencies.