New Delhi, Jan 03 (Agencies): Ratings agency ICRA on Monday said the credit profile of Indian oil firms rated by it will not be impacted in the short run by RBI's recent decision to bar dollar and euro payments for imports from Iran.
"Credit profile of ICRA rated downstream oil companies will not be immediately impacted by the recent move of RBI to stop facilitating payments for Iranian crude oil imports," ICRA said in a statement.
ICRA has the highest long-term rating of 'LAAA' with a stable outlook on bank lines of the Mangalore Refinery and Petrochemicals (MRPL), besides an 'LAAA' on long-term bonds programme of Indian Oil Corporation Ltd (IOC).
RBI on December 23 said oil and other import payments to Iran will have to be settled outside the existing Asian Clearing Union (ACU) mechanism, which involves the central banks of India, Bangladesh, Maldives, Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka.
Under the ACU mechanism, imports by the nine nations are settled every two-months with every member paying for imports after netting out its exports among the union.
Till 2008, payments under the ACU mechanism were done in US dollars but after United States imposed sanctions against Iran over its suspected nuclear programme, the currency shifted to euro.
However, according to sources, RBI chose to scrap the entire system itself even though certification for crude oil imports was easy to provide and track.
"While the oil companies concerned are making efforts to find a way out, it is unclear at this juncture as to when will the issue be resolved," ICRA said.
According to the ratings agency, the issue would have minimal impact for IOC and CPCL as Iran accounts for only 3-4 per cent of their oil sourcing.
"Besides, MRPL of late has been getting a credit period of 90 days for crude oil imported from Iran, which would be significantly lower at around 30 days from other suppliers and hence can result in increase in the working capital intensity of the company," ICRA said.
India imported 21.3 million tons of crude oil from Iran in 2009-10 and this year imports are expected to be around 18 million tons as Reliance Industries has totally stopped using crude oil from the Persian Gulf nation.
Mangalore Refinery and Petrochemicals Ltd (MRPL) is the biggest importer of Iranian crude oil. Mumbai-based Essar Oil imports roughly 3 million barrels per month (5-5.5 million tons a year), Indian Oil Corp 3.5 million tons and Hindustan Petroleum Corp about 3 million tons.