India’s Mangalore Refinery and Petrochemicals Ltd (MRPL) says it has paid $1.4 billion to Iran in outstanding debts for previous oil purchases.
MRPL Managing Director H. Kumar has been quoted by the media as saying that his company owed Iran a total of $2.56 billion for purchases that still remain to be settled from 2013.
Kumar has been quoted as saying by IRNA news agency as saying that the sanctions and channels of transfer of money that had been closed in sanctions era had prevented his company from paying its oil debt to Iran till now.
Reports said in May that MRPL had paid Iran $500 million to clear parts of its debts to Iran.
The payment was made before a landmark visit to Tehran by India’s Prime Minister Narendra Modi.
The total debt by the refiners to Iran stands at around $6.5 billion.
The removal of the nuclear-related sanctions against Iran in January has already created channels for the transfer of cash to the country.
Indian refiners have been accordingly settling oil debts to Iran in euros via State Bank of India and Germany-based bank Europaeisch-Iranische Handelsbank AG (EIH).
India’s Essar Oil, which is the largest buyer of Iran’s oil in India, said in late June that it had cleared $500 million of a debt it owed to Iran for previous purchases of crude oil.
Essar owed about $3 billion to Iran over purchases that were carried out during the years Iran was under the sanctions.
India is one of the biggest clients of Iranian crude. Indian refiners shipped in 14.4% more oil from Iran at about 251,100 barrels per day (bpd) in the 2015/2016 fiscal year, which was the largest since the 2007/08 fiscal year.