India’s largest lender State Bank of India on Saturday said it is trying to ensure there would be no disruption in India’s trade with Iran following US Office of Foreign Assets Control’s sanctions imposed on four large Iranian banks.
“State Bank of India, handling a major portion of the trade with Iran, has correspondent relations with six other Iranian banks, through whom US dollar denominated Iranian transactions can take place,“ SBI said here in a statement, according to The Times of India.
Consequent upon US OFAC sanctions imposed on four large Iranian Banks, Indian trade with Iran is facing some difficulty. State Bank of India is handling a major portion of the trade with Iran.
“RBI is seized of the difficulties faced by exporters and the Indian Banks, in regard to trade with Iran. RBI is addressing individual problems faced by exporters and Indian banks so as to ensure that there is no disruption in export trade with Iran,“ the statement added.
Earlier, the US daily Boston Globe reported that the Bush administration’s new policy of sanctioning Iranian banks is facing a critical challenge as financial institutions in Russia, China, and much of the Middle East have declined to cut ties with the banks, analysts and diplomats say.
Even Afghanistan and Iraq--two countries that depend heavily on the United States--have declined to take action against Bank Melli, Iran’s largest public financial institution, which was among the first foreign banks to open branches in Baghdad and Kabul.
“Nothing is happening,“ said Sinan Shabibi, the governor of the Central Bank of Iraq, in a recent telephone interview with the newspaper.
The US blacklisted Bank Melli, Bank Mellat and Bank Saderat in October.
Bank sanctions have become more controversial since a new National Intelligence Estimate in November concluded that Iran had no nuclear weapons program.
Even before the report became public, bank sanctions stoked resentment among countries who believed that President Bush was overstepping his authority.

It was the first time in Iran that civil air transportation has been disrupted for three consecutive days.

Managing Director of Tehran’s Imam Khomeini International Airport (IKIA) Gholamhossein Baqerian was removed from his post, an informed source told Fars news agency late Saturday.
It is said the chaos this week at the international airport, including almost three days of flight delays and cancellations due to snowfall, led to the dismissal of the IKIA head.
The source said IKIA’s deputy head for planning and logistic affairs, Khalatzadeh, has been appointed to take charge of the airport temporarily.
All international flights were transferred last November to IKIA from the capital’s ageing Mehrabad International Airport.
The new IKIA airport is located about 35 kilometers south of Tehran, and passengers have to rely largely on airport taxis.
Reza Jafarzadeh, spokesman of Civil Aviation Organization of the Islamic Republic of Iran also confirmed Baqerian’s dismissal. He declined to give reasons for the action.
Baqerian assumed the post four years ago.
Some of the heaviest snowfalls in years caused severe transport disruptions in Iran last week, forcing the cancellation of most flights and the closure of many roads.
International and domestic flights to and from Tehran were cancelled due to poor technical facilities including clearing the snow from the frozen runway, leaving the passengers stranded for days.
It was the first time in Iran that civil air transportation has been disrupted for three consecutive days.
Officials say the airport has been equipped with facilities to handle ’normal’ cold weather but not such freezing conditions.

Commerce Ministry will penalize dealers who charge more for washing powder, announced the ministry’s director general for commodities supply and distribution, Abbas Qolizadeh.
He noted that the plan to supply washing powder via municipality markets is the top priority of the ministry since not only people frequently shop there but also sales in the market are strictly supervised.
He referred to the delivery of washing powder to chain stories and local cooperatives as the next priority of the ministry, adding the move will meet most of the demand.
The official said that retail sales of washing powder in shops has not been suspended because supplying a large amount of the products to municipality markets would prevent shopkeepers from overcharging, otherwise they will lose their customers.
He called on the people to contact Commerce Ministry and report cases of overcharging. The phone number is 124.
Meanwhile ISNA reported that a special meeting was held in the Commerce Ministry to discuss ways of controlling skyrocketing prices of detergents. Despite pledges by officials to supply a substantial amount of washing powder to the market from Saturday, the problem has yet not been resolved.
Head of the Unions of Supermarket Owners Saeed Derakhshan said that no washing powder has been supplied to them yet.
He said that a large number of unauthorized stores are selling detergents at 1,0000 to 12,000 rials these days.
In another development, managing director of National Petrochemical Company Gholamhossein Nejabat said that increased price of washing powder is not related to liberalizing the price petrochemical products since industrial units have always procured raw materials from linear alkylbenzene (LAB) plants of Isfahan and Kermanshah petrochemical complexes at open market rates.

Oil Ministry has diverted gas from many cement and steel factories to home use.

Low pressure in the natural gas network in recent days due to a sharp drop in temperatures has led to drastic rise in consumption nationwide.
This made Oil Ministry to divert gas from many industrial units to home use and industries are being supplied alternative fuels such as liquid gas and mazut. Low gas pressure first affected cement factories followed by steel mills.
Head of Marketing Division of Tehran Cement Factor told ISNA that gas delivery to the factory was suspended two weeks ago. “Production has not yet faced difficulty since we are using our reserve mazut,“ Hedayat Razavi said, predicting that the situation would become gloomy once stored fuel runs out.
He urged the ministry to keep supplying mazut to the factory until conditions improve.
Cold snap, heavy snowfall coupled with a stoppage in Turkmenistan gas exports have left many residents of northern provinces including Mazandaran and Gilan without gas for the past weeks.
Head of the National Iranian Gas Company Reza Kasaeizadeh told the national TV on Tuesday that 500,000 households are without gas in northern provinces.
Managing director of Ekbatan Cement Factory also stated that cement production in the factory would be brought to a standstill unless fuel is supplied in due time.
The factory is continuing production since it has stored mazut before, Mahmoud Jenabi said and added, “But some factories have stopped production.“
Meanwhile, Ali Amini, managing director of Faraz Firouzkouh Cement Factory, said work in the factory which used to produce 3,300 tons of cement daily has been stopped since 15 days ago, meaning about 50,000 tons of much-needed cement have not been produced.
Officials have so far failed to supply mazut to the factory despite pledges, he added.
“Mazut transportation from the southern port of Mahshahr takes four to five days given the current road condition and since the weather is cold it cannot immediately be uploaded.“
Amini underlined that the fact that some cement factories cannot run on fuels other than gas has intensified the problem.
Deputy Industry Ministry, Mohammad Reza Mesforoush explained that although gas supplies to a majority of cement factories has been stopped, Oil Ministry is delivering mazut to them instead.
According to the official, suspension of activities in some factories has not yet affected production since ’we are ahead of the target’ set in the Fourth Five-Year Development Plan (2005-2010).
Meanwhile, the government has halted transfer of gas to two giant steel factories to channel their quota to northern provinces hard hit by the recent freezing wintry weather.
Mobarakeh Steel Complex and Isfahan Steel Mills produce 6.9 million tons of steel per year (or 65 percent of the total national output).
Announcing this, deputy Interior Ministry for development affairs, Mehdi Hashemi stated that these factories consume five million cubic meters of gas per day and their quota has been diverted to Mazandaran province.
During a surprise visit to Sari, the capital of Mazandaran province, President Mahmoud Ahmadinejad promised that gas supplies to the northern regions will be restored this Monday or Tuesday.

There are now 338 CNG stations nationwide.

Some 650,000 vehicles have been converted to dual-fuel system either in the production process in factories or at specialized workshops since last year, Minister of Industries and Mines Ali Akbar Mehrabian disclosed.
Given that the number of cars whose engines have been modified to run on both compressed natural gas (CNG) and gasoline from 2000 to 2006 was only 100,000 and the figure rose 6.5-fold in slightly more than a year, IRIB quoted Mehrabian as saying Saturday.
Demand for CNG-run vehicles has risen considerably since the government announced gasoline rationing last year. Consequently, CNG stations have become busier.
There are now 338 CNG stations nationwide, according to Mehrabian, of which 228 were constructed recently and hopefully this figure will increase once the government passes new laws in this regard.
Since most of the bi-fuel vehicles are currently operating in the public transport system, more gas stations can mean less traffic in larger cities.
Since gasoline rationing program was implemented in June 2007, consumption has dropped to 59.5 million liters per day whereas this figure had been estimated to reach 82.5 million by now based on a study of consumption pattern in a ten-year period if rationing had not been implemented, the official asserted.
Some 23 million liters of gasoline are being conserved per day since it was rationed which means $4.6 billion is being saved per annum. This is equal to 25 percent of the annual budget allocated for national development projects.

Conflicting reports are still coming in on the reasons for the reduction in Turkmenistan’s daily deliveries of up to 23 million cubic meters of gas to Iran last month.
While Ashkhabad blames technical problems for the halt, Iranian officials say Turkmenistan seeks doubling of the price for gas it exports to Iran.
On Sunday, Turkmen foreign ministry issued a press release on what Ashkhabad says ’continued reports with regards to the alleged halt of gas supplies by Turkmenistan’.
“This kind of information is incorrect. The Turkmen side had reported earlier that gas supplies to Iran were suspended due to technical problems related to the need to conduct preventive repair of the gas pipeline,“ the press release says, Turkmenistan.ru reported.
It added that such preventive repair is conducted in accordance with recognized technical norms and standards and takes some time. At the same time, the completion of preventive repair also depends on the issue of funding.
“In this regard, it is important to emphasize the Iranian side’s failure to honor its obligations on payment of gas supplied earlier from Turkmenistan holds in the timely completion of preventive repair.“
This is while many Iranian experts including those in the upper echelon of the Oil Ministry have repeatedly said Turkmenistan is seeking higher price.
Iran’s oil minister, Gholamhossein Nozari, said on Wednesday Iran would not hold price talks until supplies are resumed.
Foreign Ministry spokesman also said on Sunday that Iran was in talks with Turkmenistan but was discussing technical not price issues.
Iran and Turkmenistan signed an agreement last year to increase the volume of gas exports from eight to 14 billion cubic meters per year at $75 per 1,000 cubic meters but Turkmenistan has called for annulment of the agreement, an unnamed Oil Ministry official told Fars news agency last week.
Turkmenistan reached an agreement in November to increase the price of gas it delivers to Russia’s gas export monopoly Gazprom, to $130 per 1,000 cubic meters in the first half of 2008 and $150 in the second half, up from $100.
Iranian Foreign Ministry spokesman Mohammad Ali Hosseini told Reuters on Sunday that Iran had a 25-year contract with Turkmenistan which included a section on how to resolve disputes.
“The main reason for the natural gas export cut from Turkmenistan is technical and both parties are in talks to remove the technical problem,“ he said.

Deputy head of Central Bank of Iran for legal and parliamentary affairs attributed the issuance of travelers’ checks to the absence of high-denomination banknotes.
Heidar Mostakhdemin-Hosseini called for issuing more 50,000-rial banknotes.
Speaking to MNA, he said that the country is lagging in terms of issuing higher denomination banknotes.
Stressing that high-denomination banknotes should have been circulated sooner, he said that the initiative would help reduce the number of travelers’ checks.
Rejecting that high-denomination banknotes would lead to a rise in inflation and liquidity, he added that low-denomination banknotes and coins are not used much--even in the simplest transactions.
Mostakhdemin-Hosseini pointed out that at present banks could not meet the client’s demands for 50,000-rial banknotes.
Therefore more high-denomination banknotes should be printed as a first step and the issuance of 100,000-rial banknotes should be pursued in the second step.
According to him, if travelers’ checks are issued as per regulations and CBI supervision, it would not have an impact on liquidity.