India won't cut oil imports from Iran

Last Updated: Thu, Apr 11, 2013 23:30 hrs

Berlin: The Indian government does not intend to cut oil imports from Iran due to US-backed sanctions and the recent decline in purchases were due to payments, insurance and logistics problems, Foreign Secretary Ranjan Mathai said Thursday.

"We will continue to buy oil from Iran," Mathai, who is part of a high-level delegation led by Prime Minister Manmohan Singh to Germany, told reporters here.

The foreign secretary said import decisions were taken by the oil marketing companies on commercial basis and the government has no role in recent decline in the purchases from Iran.

"There are banking problems. There are insurance problem. It is related to logistics and management of oil," Mathai said.

According to the International Energy Agency, Iran's oil exports have declined sharply in the past two months due to lower imports by its key buyers, including India.

Some analysts feel that the Indian government has cut oil imports from Iran due to increasing pressure from the United States.

The US and the European Union, at the beginning of 2012, imposed new sanctions on Iran, asking to stop its nuclear enrichment programme.

Western countries suspect that Iran is developing nuclear weapons with military intent, while Iran denies this, saying its programme was meant for civilian use.

Earlier addressing a joint press conference with German Chancellor Angela Merkel, Indian Prime Minister Manmohan Singh said Iran nuclear issue was complex and should be resolved in a peaceful manner through negotiations.

"We respect Iran's right to use nuclear energy for peaceful purpose," Manmohan Singh said, adding India would favour peaceful resolution of the issues related to Iran and western countries, especially the US and Europe.

The prime minister said Iran was India's fourth largest supplier of oil and it was crucially important from the country's energy security point of view.

Nearly 12 percent of India's oil imports come from Iran. The majority of the purchases are done by refiners like Hindustan Petroleum Corporation Limited, Mangalore Refinery and Petrochemicals Limited and Essar Oil.

More from Sify: