Under a pact reached in November, Iran won access to $4.2 billion in oil revenues held by its buyers, to be paid out in eight money transfers through July. The payments were linked to Iran carrying continuous reduction in its nuclear activities.
Iran and six world powers have now agreed to extend the November deal another four months, after failing to reach a final agreement before a July 20 deadline. The extension allows Tehran access to another $2.8 billion in frozen oil monies.
Five Indian refiners Mangalore Refinery and Petrochemicals, Essar Oil, Indian Oil, Hindustan Petroleum and HPCL-Mittal Energy (HMEL) have partly paid money owed for crude imports in the previous two instalments.
Of the total of about $4.6 billion the refiners owe Iran as of May 31, they have paid $1.65 billion by taking the last three of the eight payment slots scheduled in the November deal.
In the latest round of payments, HMEL, part owned by steel tycoon LN Mittal, did not make its payment due to exchange rate fluctuations, the sources said. That lead to a higher payout by the other four.
HMEL shall not be participating in this payment process whereby exchange losses are being imposed upon HMEL contrary to commercial understanding, the company said to the oil ministry earlier this month in a letter seen by Reuters.
HMEL as a policy does not comment on its crude sourcing or matters associated with it, a spokeswoman for the company said, replying to an email seeking comments.
Essar Oil cleared dues of $240 million, followed by $236 million by MRPL, $67 million by IOC and $7 million by HPCL, which also has a stake in HMEL, the sources said.
HMEL was due to pay money owed for 4 million barrels of oil imported from Iran in 2012. Since then, however, the rupee has weakened, and the fluctuation would increase its cost by about 10%, the company said in the letter.
India, which imports a total of 4 million barrels per day of oil, has been steadily reducing its dependence on Iran. Over the last five years to the fiscal year ended this past March 31, Iran's share of India's crude imports has fallen by two-thirds to 5.8%.
However, in the January-June period for this year its crude imports from Iran rose by a third compared to a year ago, data from trade sources showed.