Union finance ministry will decide on the proposal of petroleum ministry to use Rs 1,000 crore from the the Oil Industry Development Board (OIDB) fund for setting up a proposed insurance fund.
The oil ministry proposed to set up a fund to provide insurance to local refining companies that use Iranian crude oil as re-insurance companies from Western countries refrained from offering their service for refineries using Iranian oil.
Global re-insurers refrain from insuring companies that use Iranian oil because of the sanctions by the West against IranÂ’s controversial nuclear programme.
Though Indian insurance companies are not governed by US and European sanctions, they do depend on reinsurance from Western companies because of the high risks.
In this backdrop, the oil ministry wants to set up the insurance fund with a corpus of Rs 2,000 crore and use Rs 1,000 crore from OIDB fund for this purpose.
Some reports indicate that the finance ministry may asj New India Assurance, United India Insurance, and National Insurance and Oriental Insurance to be a part of the proposed fund.
Meanwhile, officials from Iranian government have reportedly offered insurance to Indian refiners. The officials have offered this while holding talks with their counterparts in the Indian government recently.
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