As India frowns on paying for Russian oil with yuan, some payments held up

NEW DELHI, October 17 ------ The Indian government's discomfort over letting state-controlled refiners pay for Russian oil imports with Chinese currency has held up the payment for at least seven cargoes, people with direct knowledge of the matter said.

The tussle over payment has not disrupted deliveries so far, with Russian firms such as Rosneft continuing to supply state-controlled Indian refiners, who are seeking alternative ways for settlement. India emerged as the top importer of Russian seaborne oil this year, with refiners snapping up the crude sold at a discount after some Western nations suspended imports from Moscow over its invasion of Ukraine. But refiners often face problems in settling oil trade with Moscow after the United States and European Union imposed a price cap of US$60 a barrel on Russian oil, forcing buyers to use alternatives such as Emirati dirhams for cargoes that have gone above the cap as oil prices have risen. Reuters reported in July that Indian refiners began using yuan to pay for some oil from Russian sellers while continuing to use dollars and dirhams to settle most of their Russian oil purchases.

The Indian government, however, has become uncomfortable with using yuan for settlement, two finance ministry officials told Reuters. And, based on comments from officials at affected refiners, payment for at least seven cargoes is still pending. Some payments for recent cargoes delivered to at least two state refiners have been pending since the last week of September. It is unclear whether the government actually instructed state refiners to stop paying in yuan, but New Delhi's disapproval is plain. "It is not banned and if a private firm has yuan to settle its trade, the government will not stop it, but it will neither encourage nor facilitate such trade," said a ministry official. Indian refiners buy most of their Russian oil from traders while making some direct purchases from Russian entities.

Source: channelnewsasia.com