India ships in 10% less Iran oil in March vs Feb-trade Close.

NEW DELHI: India shipped in about 10 per cent less oil from Iran in March from the previous month, Reuters data showed, its second straight cut since the United States urged consumers to rein in purchases to pressure Tehran over its nuclear programme.

India's imports from Iran were up a hefty 89 per cent in the month from a year ago, however, contrary to deep cuts effected by China and Korea, as refiners made up annual term purchases that were disrupted last year by payment problems.

India imported about 409,100 barrels per day (bpd) from Iran last month, compared with 453,400 bpd in February and 217,800 bpd in March last year, tanker discharge data available to Reuters showed.

In the first quarter, India' crude imports from Iran rose about 58 per cent to about 450,000 bpd, the data showed, putting them ahead of China as Tehran's biggest customer, as domestic refiners honoured commitments under April-March deals.

An expansion of refining capacity has also been a factor in increased imports, a trade source said.

From April, India's Iranian oil imports will fall sharply when new reduced annual deals begin. China's and Korea's annual oil import deals with Iran start from January.

Tehran says the programme is for power generation. Indian Finance Minister Pranab Mukherjee said recently the country was importing 280,000 bpd from Iran and had "substantially" reduced imports from Tehran.

India used to buy 12 per cent of its oil needs from the Islamic republic, worth about $11 billion annually, making Iran its No. 2 supplier after Saudi Arabia. In the first quarter Iran continued to be India's second biggest supplier of oil.

The country's refining base increased in the last fiscal year as companies built new plants and raised capacity ahead of a March 31 deadline to take advantage of tax benefits.

Essar Oil had significantly raised purchases from Iran in the Jan-March quarter as its Vadinar refinery was operating at a higher capacity.

The refiner has a deal to buy 100,000 bpd in the current fiscal year from Iran but it plans to lift 15 per cent less from Tehran after the New Delhi government privately asked refiners to cut by at least 15 per cent.

Mangalore Refinery and Petrochemicals Ltd -- Iran's biggest Indian client -- has also raised its southern India-based plant's capacity to 300,000 bpd.

The refinery was Iran's biggest Indian oil client last fiscal year and had a deal to buy 142,000 bpd but MRPL's contract for the current fiscal year has been reduced to 80,000-100,000 bpd.

Source : economictimes.indiatimes.com