India’s state-run Mangalore Refinery and Petrochemicals Ltd currently owes about $2.6 billion to Iran and wants to settle the dues as soon as a payment mechanism is worked out, Managing Director H. Kumar said.
The state-run refiner, which operates a 300,000 barrels per day (bpd) refinery in southern Karnataka state, is a key oil client of Iran.
The central banks of India and Iran have reached an arrangement to use European banks to process pending oil payments to Tehran, oil minister Dharmendra Pradhan told Reuters last week.
MRPL has shut a 60,000 bpd crude unit, a coker and a diesel hydrotreater, along with some other units since May 3 due to an acute water shortage in the state.
The local authorities have stopped water supply to the refinery.
“Our endeavour is to run the units till the last day…If it doesn’t rain till May 17-18 then we will review the situation. We may have to shut some more units,” said Mr Kumar.
Because of the shutdown, MRPL’s diesel and liquefied petroleum gas production has been halved while gasoline consumption has been cut by 30 percent.