Ignore US ire, import Iran oil to save $8.5bn, Veerappa Moily suggests

Discussion in 'Foreign Relations' started by Vishwarupa, Sep 2, 2013.

  1. Vishwarupa

    Vishwarupa Senior Member Senior Member

    Joined:
    Sep 15, 2009
    Messages:
    2,029
    Likes Received:
    2,206
    NEW DELHI: The Manmohan Singh government will have to tread on a diplomatic tightrope with oil minister M Veerappa Moily suggesting India may save nearly $8.5 billion (around Rs 57,000 crore) by importing cheaper crude from Iran which faces UN sanctions in the wake of its nuclear programme.

    In a note to Prime Minister Manmohan Singh and finance minister P Chidambaram, Moily has said that so far this year, India has imported 2 million tonnes of crude from Iran and an additional 11 million tonnes would pare the forex outgo by almost $8.5 billion, assuming oil price at $105.

    Last year, India had imported a little over 13 million tonnes from Iran and Moily has suggested that state-run oil companies should be asked to maintain their overall crude imports at last year's level.


    The Iran gambit is central to Moily's attempt to reduce India's oil bill by $20 billion but will need a reversal of India's recent attempts to reduce business with the regime in Tehran.

    But the need to control an expanding deficit — fueled by a weak rupee — is becoming urgent, and India may have to repair ties with Iran that have hit an air pocket over the Iranian security forces detaining an Indian ship transporting Iraqi crude. India will need to display some creative diplomacy to tip toe around international sanctions and US sensibilities.

    On August 12, even Chidambaram had spoken of importing more crude from Iran as part of his drive to contain current account deficit within the $70 billion target for this financial year. He had, however, made it clear that the operations had be undertaken without breaching UN sanctions.

    Although several Asian countries, including India and China, have been provided flexibility, the government has reduced its dependence on Iran. In 2012-13, India imported about 7.2% of its oil from Iran, compared to 10.5% in the previous year.

    India imports over 70% of its oil requirement, which is one of the key drivers of India's import bill. In the absence of a rise in exports, the trade and current account deficits have widened, adding to the pressure on the rupee.

    But unlike imports from other countries, India can make the payments to Iran through a rupee account, which was created as part of the settlement mechanism to deal with the UN sanctions.

    Moily's plan is in response to the PM's call to the ministry seeking a $25 billion cut in the oil import bill to narrow the current account deficit. He has suggested several measures to reduce the oil import bill by $19-20 billion this fiscal.

    Ignore US ire, import Iran oil to save $8.5bn, Veerappa Moily suggests - The Times of India
     
    angeldude13 and arnabmit like this.
  2.  
  3. angeldude13

    angeldude13 Lestat De Lioncourt Senior Member

    Joined:
    Dec 18, 2010
    Messages:
    1,745
    Likes Received:
    1,281
    Re: Ignore US ire, import Iran oil to save $8.5bn, Veerappa Moily sugg

    yeah [email protected] US and lets get cheap oil.
    sounds legit and logical to me :gangnam:
     
    kseeker likes this.
  4. arnabmit

    arnabmit Homo Communis Indus Senior Member

    Joined:
    Dec 25, 2012
    Messages:
    5,894
    Likes Received:
    5,859
    Location:
    Kolkata
    Re: Ignore US ire, import Iran oil to save $8.5bn, Veerappa Moily sugg

    If implemented, one of the very few logical, practical and good decisions to the credit of UPA.
     
  5. Ray

    Ray The Chairman Defence Professionals Moderator

    Joined:
    Apr 17, 2009
    Messages:
    43,118
    Likes Received:
    23,543
    Location:
    Somewhere
    Re: Ignore US ire, import Iran oil to save $8.5bn, Veerappa Moily sugg

    US Ambassador to India David Mulford on Monday lent credence to the rumours that it was because of American pressure that the then petroleum minister Mani Shankar Aiyar was thrown out of the petroleum ministry during the last Cabinet reshuffle.

    The reason? Because Aiyar was too gung-ho on the envisaged Iran-India gas pipeline that Washington strongly opposed.

    Why Aiyar lost petroleum ministry

    ****************************

    Will history repeat itself?

    Does Moily smell defeat in the air in 2014 of the Congress?

    Is that why he wants to show that he is a man of his own principles so that, at least, he wins his place in the Parliament, as he watches his ship sink into oblivion?

    There is no doubt that India must look after her own interests.

    But will this weak kneed Govt show any guts when the PM is an US acolyte?

    Rise in petroleum prices will not affect those in Govt. They move in Govt vehicles with the taxpayer footing the Govt's petroleum bill.

    The rise of petroleum prices have already started with the latest hike of yesterday will affect all the prices of all commodities.

    But then the MPs will still have a tuck in at the Parliament Canteen (run by the Railways) at rates that even the poor would find cheap.

    No wonder Raj Babbar felt that one could exists at 12 bucks a day and the other bloke at 5 bucks, since they have lost touch with real prices of food being the favoured sons in law of the country!
     
    Last edited: Sep 2, 2013
    drkrn and Vishwarupa like this.
  6. jamesvaikom

    jamesvaikom Regular Member

    Joined:
    Aug 16, 2012
    Messages:
    367
    Likes Received:
    293
    Re: Ignore US ire, import Iran oil to save $8.5bn, Veerappa Moily sugg

    We have huge investments in shale oil and gas fields in US. Our problem is we are overdependent on other countries. We have not done anything to reduce demand supply gap. Our ministers are begging infront of their Saudi and Kuwait counterparts to avoid deportation of Indians working there. So we can't oppose any country.
     
  7. jamesvaikom

    jamesvaikom Regular Member

    Joined:
    Aug 16, 2012
    Messages:
    367
    Likes Received:
    293
    Re: Ignore US ire, import Iran oil to save $8.5bn, Veerappa Moily sugg

    Pipeline through Pakistan is a waste of money. If Pakistan is confident then let them first construct I-P pipeline. Then we can think of extending that pipeline to India.
     

Share This Page