India's state-controlled refineries have been hesitant to use the Chinese yuan to pay for Russian oil imports due to higher fees for currency conversions, Reuters reported on Monday citing people with direct knowledge of the matter.
The issue has reportedly led to delays in payments for at least seven shipments.
Some payments for recent cargoes delivered to at least two state refiners have reportedly been pending since late September. Indian refiners buy most of their Russian oil from third-party traders, while making some direct purchases from Russian entities.
The settlement issue has not disrupted the shipment of Russian crude to the world’s third biggest oil consumer, but refiners are now seeking alternative payment options, the news agency claims.
Refining sources told Reuters that traders have offered to strike deals in UAE dirhams, but Russian sellers have held out for yuan. They added that settlements in yuan send costs rising, as rupees first need to be converted to Hong Kong dollars, a process which costs 2-3% more than settling in dirhams.
India has become a major importer of Russian seaborne crude this year since Moscow rerouted shipments from Western nations, after they suspended energy purchases in response to the Ukraine conflict. New Delhi has not supported anti-Russia sanctions or joined the EU and G7 price cap.
In July, Reuters reported that Indian refiners began using Chinese yuan for some Russian oil payments, while continuing to use dollars and dirhams for most of their Russian oil purchases.