To provide insurance cover to Indian domestic refineries that process crude oil imported from Iran, the process of setting up of a Rs 2,000-crore insurance fund has begun by the Union Finance Ministry. The Finance Ministry’s act comes after the the Union Petroleum Ministry agreed to provide the required money to being in fund.
For the government, the creation of the insurance pool had been necessitated as domestic insurance companies were reluctant to cover to refiners processing Iranian crude, as sanctions by the United Nations and the European Union made it difficult for them to find reinsurance in European markets, to hedge risks.
The Union Petroleum Ministry has agreed to provide first tranche of Rs 500 crore from Oil Industry Development Board (OIDB).
The Petroleum Ministry has also agreed to provide the second tranche of Rs 500 crore as the next tranche, the official said, adding, the process of setting up the fund was held up as money from oil industry had not come so far.
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