India doesn’t plan to use Venezuela’s ‘petro’ cryptocurrency to pay for crude oil imports from the Latin American nation of which it is a large regular customer, India’s Foreign Minister Sushma Swaraj said on Monday.
India’s central bank has issued an order saying that it doesn’t allow trade in cryptocurrency, Swaraj said at a news conference, citing that order.
India’s average oil imports from Venezuela have recently slumped to their lowest level since 2012.
Venezuela faces increasingly stricter U.S. financial sanctions and is trying to circumvent them by offering the customers of its declining oil production to pay in the El Petro cryptocurrency, touted by Nicolas Maduro as the first-ever sovereign digital currency backed by oil reserves.
India, on the other hand, faces an increasingly fatter crude oil import bill, as oil prices have rallied in the past few months and worsened Indian current accounts, with officials already worried that the high oil prices and the fuel prices at five-year-highs have started to affect economic growth.
India’s Petroleum Minister Dharmendra Pradhan complained earlier this month to Saudi Arabia’s Energy Minister Khalid al-Falih that rallying oil prices were hurting the Indian economy, and reiterated the need for “stable and moderate” prices.
Last month, Indian media reported that Venezuela had offered India a 30-percent discount on crude oil purchases, but only if India agrees to pay in El Petro. India has refused.
Venezuela, for its part, has also recently suggested that it was willing to accept rupees for the oil it sells to India—another way of bypassing the U.S. sanctions on dollar-based trade. The South American nation could then use its rupees to buy Indian food products and medicines, Indian media cited Venezuela’s envoy Augusto Montiel as saying last week.
By Tsvetana Paraskova for Oilprice.com