The oil payment issue needs immediate solution as Iran has given a warning that it can not go on supplying scheduled oil supplies to the Indian refineries without getting payment and the mode of payment has to be sorted out by August this year. Though officially, no formal communication has been sent to the refineries, Iran’s position has been made known to the Indian officials during the bilateral talks in New Delhi in the last week of May this year.

India and Iran have been negotiating for more than six months on ways to resolve the Payment deadlock on a long term basis and salvage the Indo-Iranian trade which is worth US$12 billion annually. The problem arose in December last year when the Reserve Bank of India stopped payment to Iran through the Asian Clearing Union due to US pressure. India told Iran that it will find out an alternative mode of payment but so far, no such route has been identified through discussions.

Indian sources say that Iran is not comfortable with any other currency except euro, US dollar and Japanese yen. India started paying through a German bank for some time in March this year but this was stopped soon after as the German government was under US pressure and the German bank refused to channelise the payments further. India tried Japan but the Japanese government fully supported the US position and the Japanese banks refused to touch Indian payments to Iran. As a result, the situation has taken a serious dimension and Iran is getting restless.

Iran is still working for a solution on the mode of payment and it has continued the supplies of oil but this situation can not continue for a longer period and Indian officials also know it. The US is spoiling all Indian efforts to find an alternative route. India has to assert and work out a solution for this. The oil supplies from Iran is of crucial importance to Indian economy at this time of global oil crisis and all efforts have to be made now to find out an alternative route even that means annoying the US.

Similar is the situation with India’s dillydallying on the issue of participation in the ambitious Iran-Pakistan-India gas pipeline project. At the last meeting of the senior Iranian officials in New Delhi last month, India got a clear hint from Mr. Ali Bagheri of Iran’s Supreme National Security Council that Iran will not wait for an indefinite period for India to effectively participate for implementing this ambitious project and Iran and Pakistan will welcome China as one of the participants. In fact, Pakistan is very much interested in getting China in the project and Pakistan has told Iran that China, with its huge financial resources and the muscle power to face the US pressure, will be the most suitable partner in speedily implementing the project which is not progressing faster due to India’s vacillations on taking a firm position.

Iranian leader is supposed to have told the senior Indian officials that China is ready to join the pipeline project once India dissociates from the project. Iran has said that it is going ahead with the pipeline project to supply its gas to Pakistan if India is not interested but it should be in India’s interests to remain a participant in this IPI project and take effective measures for its implementation.

Energy experts feel that India should be taking a positive stance towards discussing the issues like security, pricing and transportation vis a vis IPI gas pipeline project for evolving a solution, but there is reservation still from the Prime Minister’s Office and Dr. Manmohan Singh is personally against taking any steps which will antagonize the US administration at this stage. As a result, though there is no official declaration that India is not going to participate in the IPI gas pipeline project, India is not responding to the Iranian proposals in a manner which will facilitate a solution.

But this anti-IPI attitude of the Prime Minister’s Office is being challenged now as the possibility of ambitious nuclear power generation plans in India have got a setback following Japanese nuclear plant disaster and also the latest decision of the Nuclear Suppliers Group which has cast doubts on India’s getting sensitive nuclear technology from the USA. The energy experts are saying that it makes sense now to go the wholehog for the IPI pipeline since this will bar China from entering this vital oil and gas area at the cost of India and also it will help India in bolstering its gas supply in a situation when India is importing 84 per cent of its total petroleum demand in the country. In five years, India will become the fourth largest consumer of energy and the demand for gas is increasing .At this time, it is in the interests of India’s energy security to pep up the gas supply from all possible sources including both TAPI and IPI.

The energy experts are mentioning that the security concerns expressed about IPI pipeline are no different from those related to TAPI gas project. It is also true that TAPI has the US backing whereas the US is opposed to India, Pakistan or any other country supplying the gas through the IPI gas pipeline. But India has to look after its national interests and if Pakistan can take the risk of participating in the IPI pipeline project defying US whip, there is no reason India should cold shoulder the IPI project due to US pressure. They feel that the latest setback to the nuclear power generation programme and China pitching for a major role in the oil rich Asia at the cost of India, make it imperative that India should explore all avenues for participating in IPI project. (IPA Service)