* India plans to cut Iran oil imports 10-15 pct
* Refiners will cut more if Iran fails to reduce prices
* Bankers not issuing short-term dollar loans for Iran oil
(Adds Japan cut plan according to top refiner, releads)
NEW DELHI, Dec 19 (Reuters) - India plans to cut oil imports
from Iran by 10 to 15 percent in the next fiscal year, and more
if Tehran does not lower prices to help cover higher costs
resulting from Western sanctions, a government source said.
Iran's top Asian oil buyers - China, India, Japan and South
Korea - have all reduced imports after the United States and the
European Union imposed sanctions aimed at curbing Tehran's
The sanctions have more than halved Iran's oil exports this
year, costing Tehran up to $5 billion a month in lost revenue.
"Next year our imports will be 10 percent to 15 percent less
than this year," said a government official with direct
knowledge of the matter, who declined to be identified because
he is not authorised to speak to the media.
"If they don't cut prices, the decline will be substantial.
Indian refiners have genuine problems with credit availability."
India, the world's fourth-biggest oil importer and Iran's
second-biggest client, relies on outside supplies for 80 percent
of its oil needs, or about 3.5 million barrels per day (bpd).
Officials at state refiners said they had yet to receive any
directive from the government to cut imports from Iran in the
year beginning April 2013, when annual contracts start.
But refiners would probably cut imports anyway because of
high costs, the officials said.
The push for cheaper prices is similar to a move by Chinese
refiner Sinopec, Iran's biggest buyer, last year. As
rising international pressures forced other buyers out of the
market for Iranian oil, Sinopec strong-armed Iran into giving it
better terms for its annual oil purchases.
The United States wants importing countries to make further
cuts in purchases from Iran in 2013 to avoid sanctions, a State
Department source said this month.
South Korea has already told the United States it will cut
imports by about a fifth from a year earlier in the six months
to May, government and industry sources said this month.
On Wednesday, Japan's top refiner said the country's crude
oil imports from Iran would be about 15 percent lower next year.
There is no clear indication yet on 2013 imports by China.
Daily imports into China in the first 10 months of 2012 were
down 22 percent on the 2011 figure.
For the current fiscal - and contract - year, New Delhi had
asked refiners to cut purchases from Iran by 15 percent.
Refiners have bought more from Saudi Arabia, the top supplier,
and Iraq, pushing Iran out of the number two slot.
Banks have refused to issue short-term dollar credit, also
known as buyers' credit, for Iranian oil imports because of the
sanctions, officials at refiners said.
Indian refiners say Iranian crude has become more expensive
because sanctions force them to borrow at high domestic interest
rates to finance purchases and face continuing volatility in the
rupee against the dollar.
"Economically Iranian oil is not viable. My borrowing cost
has gone up," an official at a state-run refiner said.
Starting on Feb. 6, U.S. law will prevent Iran from bringing
home its oil export earnings, a measure that will lock up a
substantial amount of Tehran's funds, U.S. officials have said.
That could affect the continuation of India's existing
payment system with Iran, which settles 55 percent in euros
through Turkey's Halkbank. The rest is settled in
rupees through a local bank.
(Reporting by Nidhi Verma; Editing by Simon Webb and Jane