India doesn’t want its state refiners to pay for Russian oil in Chinese yuan? Some payments held up, says report – DailyExpertNews

The Indian government’s unwillingness to make state-controlled refineries pay Russian oil imports along Chinese currency has led to payment delays for at least seven shipments, sources familiar with the matter told Reuters. Despite the payment dispute, Russian companies such as Rosneft continue to supply oil Indian refineries. India has become the top importer of Russian marine oil this year, benefiting from discounts following the suspension of Russian oil imports by some Western countries due to the conflict in Ukraine, the report said.
The problem comes as refiners face difficulty arranging their trade with Moscow given the $60 per barrel price ceiling imposed on Russian oil by the United States and the European Union. To get through this ceiling, buyers have turned to alternatives such as Emirati dirhams for cargoes that exceed the limit as oil prices rise.
In July, it was reported that Indian refineries were starting to use it Chinese Yuan for some Russian oil payments, while continuing to use Russian dollars and dirhams for most of their Russian oil payments purchase oil. However, the Indian government has expressed discomfort over the use of the yuan for payments, the report quoted two finance ministry officials as saying. Officials at the affected refineries noted that payment is still pending for at least seven shipments, some of which have been outstanding since late September.
It remains unclear whether the government has explicitly ordered state refineries to stop using yuan, but it is clear that New Delhi does not condone this practice. A government official stated that while the government neither encourages nor facilitates such trade.

Most of the Russian oil purchased by Indian refiners comes from traders, with some direct purchases from Russian entities. While traders have been willing to negotiate deals in dirhams, Russian sellers have pushed for yuan.
Government-controlled Indian oil company has previously used yuan and other currencies to pay for Russian oil. Bharat Petroleum Corp and Hindustan Petroleum, which have not used yuan for payments so far, have also been asked by Russian suppliers to settle in Chinese currency.
Private Indian refiners, on the other hand, have continued to use the yuan and other currencies to import Russian oil, with the majority of Indian purchases of Russian oil being settled in dirhams. However, paying in Yuan incurs additional conversion fees as rupees must first be converted into Hong Kong dollars and then into Yuan, which incurs an additional 2-3% fee compared to paying in Dirhams.
Indian Oil, Bharat Petroleum Corp, Hindustan Petroleum and the country’s oil and finance ministries did not respond to requests for comment from Reuters. Indian state refiners would prefer to use rupees for Russian oil payments, but Russia is less likely to accept rupees given the trade balance that favors Moscow.
Some in India see the use of the yuan as an advantage for China, which is worrying given the strained relationship between the two countries after a 2020 border conflict led to casualties on both sides.