India resumes payments to Iran for crude oil imports

After the RBI in December stopped use of a long-standing clearing mechanism for payments, India had last month decided to pay for the Iranian oil using euros through German-based EIH Bank

New Delhi: More than three months after the Reserve Bank of India (RBI) scrapped a long-standing payment mechanism used to pay for Iranian crude imports, India has resumed payments to the nation's second largest oil supplier using an alternative system, reports PTI.

"Pending dues of National Iranian Oil Company (NIOC) are now being cleared and as of 1 March 2011, payment of 1.5 billion euros has been made to the Central Bank of Iran," oil minister S Jaipal Reddy today told the Lok Sabha in a written reply.

After the RBI in December stopped use of a long-standing clearing mechanism for payments, India had last month decided to pay for the Iranian oil using euros through German-based Europisch-Iranische Handelsbank AG (EIH Bank).

"Consequent to the withdrawal of the Asian Clearing Union mechanism by the RBI with effect from 23 December 2010, all payments to Iran for import of crude oil have to be settled in any permitted currency outside the ACU mechanism," he said.

India imports 12 million barrels of crude oil every month from Iran, which is the nation's second-largest supplier after Saudi Arabia.

After the scrapping of the ACU, Iran, which makes up for over 12% of India's oil needs, had continued to supply oil on credit despite the outstanding amount crossing a staggering $3 billion.

Mr Reddy said 21.2 million tonnes of crude oil was imported from Iran in 2009-10 fiscal. Mangalore Refinery & Petroleum imported 6.9 million tonnes, Essar Oil 5.3 million tonnes, Reliance Industries 3.3 million tonnes, Hindustan Petroleum Corporation 3.2 million tonnes and Indian Oil Corporation 2.5 million tonnes.

This fiscal, Reliance has completely stopped using Iranian oil and in first six months 8.9 million tonnes of oil was imported from Iran, Mr Reddy said.

Sources said as per the requirement of the German central bank, Deutsche Bundesbank (DBB)-which had permitted payment in euros through EIH-each drop of oil bought from US-sanctioned Iran is being certified.

First, the oil companies are certifying the crude oil they bought from Iran and payments that are due. This is being counter-certified by the petroleum ministry. Furthermore, State Bank of India-the banker which is to route the payments-is also affixing its seal on the transactions.

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Food inflation eases to 10.39% for the week ended 19th Feb

Food inflation declined by one percentage point to 10.39% from 11.49% in the previous week. Meanwhile, headline inflation, as measured by the wholesale price index (WPI), stood at 8.23% in January, much above the comfort level of 5%-6%

New Delhi: Food inflation declined by more than one percentage point to 10.39% for the week ended 19th February from 11.49% in the previous week and 21.62% in the corresponding period a year ago. The fall in food inflation has been attributed to a reduction in prices of onions, potatoes and pulses, reports PTI.

However, prices of fruit, milk and vegetables as a group continued to remain high.

According to data released by the government, prices of potatoes declined by 12.66% year-on-year, while pulses fell by 5.02%, onions by 3.64% and wheat by 2.06%.

The items that became dearer during the reporting week vis-à-vis the corresponding year-ago period were fruits (up 16.34%), eggs, meat and fish (14.5%), vegetables (14.29%) and milk (11.07%).

The decline in the prices of certain food items will have a favourable impact on headline inflation in February.

Headline inflation, as measured by the wholesale price index (WPI), stood at 8.23% in January, much above the comfort level of 5%-6%.

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SC quashes appointment of Thomas as CVC, Thomas resigns

60-year-old CV Thomas, facing a corruption case in a Kerala court relating to palmolein import scam, resigned immediately after the apex court gave its verdict, just six months after he was appointed as the 14th CVC

New Delhi: Dealing a big blow to United Progressive Alliance (UPA) government, the Supreme Court on Thursday quashed the appointment of PJ Thomas as Central Vigilance Commissioner (CVC), holding that the recommendation made by the high-powered panel-headed by prime minister Manmohan Singh-did not consider the relevant material and therefore its advice "does not exist in law", reports PTI.

60-year-old Mr Thomas, facing a corruption case in a Kerala court relating to palmolein import scam, resigned immediately after the apex court gave its keenly awaited verdict, just six months after the former bureaucrat was appointed as the 14th CVC.

"He has resigned. The Supreme Court has also held his appointment as illegal," law minister Veerappa Moily told reporters.

A bench comprising Chief Justice SH Kapadia and justices KS Radhakrishnan and Swatantra Kumar said, "We declare that the recommendation made by the high-powered committee is 'non-est' in law. Which means that the recommendations made on 3 September 2010 does not exist in law. Consequently, the appointment of Mr Thomas goes."

In comments that came as an embarrassment for the prime minister, the bench severely criticised the committee for not considering the relevant material including the pending criminal case against Mr Thomas in the palmolein import case and the recommendations of the Department of Personnel and Training (DoPT) between 2000-04 for initiating disciplinary proceedings against him.

"It is the duty of the high-powered committee (HPC) to not to recommend the name of a person who can affect the institutional integrity of the CVC," the bench said, adding the institutional integrity and the integrity of a person holding the post of CVC is the touchstone of the office under the CVC Act.

The court said the HPC failed to consider relevant material against Mr Thomas and the entire focus was on his bio-data and none of the government bodies including the DoPT focussed on larger issue of institutional integrity.

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