Fuel supplies to Mauritius may be disrupted because of RBI

13 years, 9 months ago - 15 January 2011

The fuel could be more expensive to Mauritians. The Reserve Bank of India has decided to reconsider the protocol of gross payments to Iran.

The agreement signed between the government and the Indian company Mangalore Refinery is likely to play a dirty trick to Mauritius consumers. In fact, Mangalore Refinery to supply heavy oil from Iran and serviced his debt to that country through a mechanism used by many Indian companies. Now the Reserve Bank of India (RBI) has decided to review the protocol and Mangalore Refinery is in a deadlock.

In a statement to Radio One at Friday, January 14, the Mauritian Minister of Industry and Commerce, Showkutally Soodhun, said that Mangalore Refinery announced that guarantees that "Mauritius is no risk of shortage" and that a delegation flew to Iran today to address the situation.

But this promise Showkutally Soodhun currently relies only on an unclear promise of Indians. In addition, Mauritius currently has only eight weeks of fuel reserves.

Unilaterally, says Business Standard, therefore the Asian Clearing Union (ACU) has been cancelled putting an end to payments in U.S. dollars and Euros to Iran. Mangalore Refinery is more affected than 60% of its imports come from countries that heavily criticized internationally for its nuclear program to military use.

The trouble for Mauritius is that most of its fuel consumption is in the hands of the Indian company. Port Louis annually consumes 100,000 tons of gasoline, 350,000 tons of diesel and 270,000 tons of Jet A-1.Mangalore Refinery has spoken its worry to the RBI.

Moreover Mangalore Refinery is the largest importer of crude India with 7, 5 million tons per year. Iran is the second largest supplier in India, after Saudi Arabia: The Wahhabi kingdom he had sold 21.3 million tons of crude between 2009 and 2010.

At this point, Iran Mangalore Refinery provides fuel until the situation settles. Give up a credit line of three months in Mangalore Refinery, Iran waiting a bit until a solution is found.

If no solution is found, the Mauritian consumers will have to spend more when Mangalore Refinery will turn to another source of more expensive supply.