India clears over $2 billion of oil dues to Iran

India has paid €1.5 billion (around $2.09 billion) to clear pending dues for oil imports from Iran, minister of petroleum and natural gas S Jaipal Reddy stated today.

The payments were made in euro since the Reserve Bank of India (RBI) closed the Asian Clearing House system about three months ago (from 23 December 2010).

Payments to National Iranian Oil Company (NIOC) up to 22 December 2010 were made through the Asian Clearing Union (ACU) mechanism, he said, adding that all payments to Iran for import of crude oil have to be settled in any permitted currency outside the ACU mechanism.

"Pending dues of National Iranian Oil Company (NIOC) are now being cleared and as of March 1, 2011, payment of Euro 1.5 billion has been made to the Central Bank of Iran," Reddy stated in a written reply.

He said the payment modalities were worked out by a composite Indian delegation consisting of representatives of different ministries and organisations that visited Iran on 14-17 January 2011. 

Reddy did not, however, specify if the transaction was effected using a proposed new mechanism involving State Bank of India and German-based European-Iranian Trade Bank AG (EIH).