India may be a rising economy but it is laggard in paying its energy bills and the Iran National Oil Company has given New Delhi a one month ultimatum to pay its $9 billion debt arrears for oil exports.
Last week the Iran National Oil Company sent a letter to the indebted Indian oil refineries stating, "If a specific method for collecting oil debts is not determined as of the month of Mordad (23 July - 22 August) this year it will stop exports to the refineries. With complete regret we must inform you until a specific method is found for paying the money for the Iran National Oil Company's export oil, in the month of August this company will not be in a position to continue sending oil to its Indian partners."
Since the beginning of the year various officials from the Iran National Oil Company, the Central Bank and the Ministry of Economic Affairs and Finance have insisted that they could collect India's debts, but up to now have been unsuccessful, Donya-ye Eqtesad newspaper reported.
India’s Mangalore and Reliance oil refineries are among the largest buyers of Iran's export crude oil but because of Indian currency constraints they have been unable to pay their oil debt to the government of Iran.
By. Charles Kennedy, Deputy Editor OilPrice.com
Charles is a writer for Oilprice.com