The Indian national daily Mint, the second largest business newspaper in the country, reported the markup last week.
It said nothing about whether the Indian refinery buying the oil was getting a discount from Iran that would justify paying the much higher transport costs.
The Iranian crude is being bought by Mangalore Refinery and Petrochemicals Ltd. (MRPL). The crude is being carried by Mercator Ltd., an Indian shipowner whose MV Omvati Prem was just loaded at Kharg Island last week. (See last week’s Iran Times, page five.)
Mint said Mercator is charging MRPL a little more than $11 a ton compared with the market charge of $6.70 per ton spot rate. It said Mercator originally told MRPL it would charge more than $13 a ton or almost double the commercial rate, but later agreed to reduce its demand.
Mint said P.P. Upadhya, managing director of Mangalore, had confirmed the rate.
Mangalore Refinery, a government-owned firm, sought bids for the crude cargo July 30 and Mercator was the sole shipping firm of the five operating in India to even respond.
But Mercator is also the sole Indian shipper to accept the limited insurance offered to Iranian cargoes by the state’s United India Insurance Co. to replace European insurance cover that has been barred by EU sanctions that took effect July 1.
The other four firms—Shipping Corp. of India, Great Eastern, Essar Shipping and India Steamship—all said the United India insurance offer was insufficient to take the risks of carrying Iranian crude.
India in the past has averaged eight to 10 oil shipments a month from Iran, mainly to refineries on its west coast. It remains to be seen how many cargoes it will now take. So far, the Omvati Prem loading last week is the only known contract.
