Mumbai: Petroleum minister Dharmendra Pradhan on Thursday reacted cautiously to the US demand to stop crude imports from Iran, saying the government "will go by the national interest".
Oil imports from Iran surged to about 705,000 barrels per day in May, the highest since last October, according to industry data, despite the threats of fresh US sanctions against Tehran after the US president Donald Trump had on 8 May unilaterally withdrew from the nuclear deal that his predecessor Obama had sewed up with Tehran.
In May the volume rose 10.2 percent over the previous month and about 45 percent over the same month last year.
While India is the second largest crude customer for Iran behind China, Iran is the third largest source of crude for the country after Iraq and Saudi Arabia. It supplied 18.4 million tonne crude in the April 2017-January 2018 period.
With around 200 million barrels per annum,India is the third largest consumer of fossil fuels after the US and China and is one of the few markets that has a steady demand growth.
"We will go by our own interests," Pradhan quipped cautiously when asked about his views on the latest US direction to the government to stop crude imports from Iran from 4 November or face economic sanctions.
The minister, who was here to attend the final leg of the roadshows for the ninth round of the city gas distribution auctions, further said, "Our source markets have widened massively in recent years.
"In fact, there is not a single oil producing country from where we don't buy crude today. We have even placed contracts with Brunei. So there is no threat of supply disruptions because of the latest threat of US sanctions."
It can be noted that Trump withdrew the US from the Iran nuclear deal on 8 May to pursue a maximum pressure campaign against Tehran's nuclear bomb programme. At that time, he gave foreign companies either 90 or 180 days to wind down their business with Iranian counterparts, depending on the type of commercial activity.
It can be noted that India has increased oil purchases from Iran to nearly pre-2012 levels after sanctions were lifted in 2015, and in May 2016, India agreed to transfer to Iran about $6.5 billion that it owed for Iranian oil shipments but which was held up for payment due to sanctions.
Following the latest American threat, the State Bank, which was facilitating payments to Iran, had last week said it would not continue with the job.
In 2010, the Reserve Bank ceased using a Tehran-based regional body, the Asian Clearing Union,to handle transactions with Iran. In January 2012, Iran agreed to accept rupee payments to settle nearly half of its sales to India.
Meanwhile, Pradhan said the new city gas distribution contracts, which will begin on July 10, if successful, will add nine more Maharashtra districts including Aurangabad, Kohlapur, Satara and Sindhudurg, among others, to the gas pipeline network. Currently six districts are covered by gas pipelines in the state.
The minister also said he has asked the Petroleum and Natural Gas Regulatory Board to work towards laying gas pipelines along the proposed Mumbai-Nagpur expressway, which if done will add 20 more districts.
Updated Date: Jun 28, 2018 19:44 PM