Ministry tweaks norms for ships bringing in crude oil from Iran
Norms have been simplified for Indian ships wanting to carry crude oil from Iran. The External Affairs Ministry on Tuesday said that India will permit foreign ships carrying Iranian crude on a case-by-case basis now, instead of the general permission being granted earlier.
With the Government withdrawing general permission granted to public sector oil companies on cost, insurance and freight (CIF) basis, Indian ships stand to benefit. This is because, in the earlier scenario, the foreign flagged vessels used to win crude transport contracts as they offered lower rates.
Insurance cover key
Indian shipping companies will be able to cash in now provided they are able to get the desired level of insurance cover to import Iranian crude.
“If we get the desired insurance cover, Indian flag bearers could benefit by moving this cargo,” Mr S.C Hajara, CMD, Shipping Corporation of India, told Business Line.
“We understand that there are some issues yet to be resolved between national insurance companies and the ship owners regarding the terms of the insurance cover to be provided to Indian ships for carrying Iranian crude oil to India,” stated an External Affairs Ministry release.
With the European Union sanctions, which came into effect on July 1, the Europe-based Protection and Indemnity (P&I) clubs that offer third party liability cover to 90 per cent of the world’s fleet, including Indian flag carriers, stopped offering cover to ships carrying Iranian cargo.
These P&I clubs offer third-party cover of up to $1 billion.
Public sector insurers have told shipping companies that they may not be able to provide cover of even $50 million for vessels carrying Iranian crude.
Indian shipping lines had sought limited insurance cover of $50 million from the Government-owned insurance companies after the P&I clubs decided to withdraw their insurance cover .
Earlier, Indian ship-owners had asked for a sovereign guarantee for transport of Iranian cargo, which the Government had turned down.
Source: Hindu Business Line