India saves Rs 5,000 crore on filling strategic oil reserves
The storages at Mangalore and Padur were half-empty and there was some space available in Vizag storage as well. These were filled by buying oil from Saudi Arabia, the UAE and Iraq.
By PTI
India has saved Rs 5,000 crore in foreign exchange after it capitalised on the global low oil prices to fill its underground strategic oil storage to shore up insurance against any supply or price disruption, the Petroleum Ministry said on Wednesday.
While the 5.33 million tonnes of emergency storage — enough to meet India’s oil needs for 9.5 days — was built in underground rock caverns in Mangalore and Padur in Karnataka and Visakhapatnam in Andhra Pradesh by the government, state-owned oil firms were in April asked to buy import oil when global rates fell to a two-decade low.
“Taking advantage of low crude prices due to the COVID-19 situation, India filled its strategic reserves to full capacity,” the ministry said in a tweet adding this led to a forex saving of Rs 5,000 crore.
Oil prices globally had slumped after coronavirus pummeled demand.
The storages at Mangalore and Padur were half-empty and there was some space available in Vizag storage as well. These were filled by buying oil from Saudi Arabia, the UAE and Iraq.
State-owned Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) as well as Mangalore Refinery and Petrochemicals Ltd (MRPL) were asked to source oil from the Middle-East countries for storing the caverns, sources said, adding the government will reimburse them of this cost at a later date.
India meets 83 per cent of its oil needs through imports. Its refiners maintain 65 days of crude storage, and when added to the storage planned and achieved by ISPRL, the Indian crude storage tally goes up to about 87 days. This is very close to the storage of 90 days mandated by IEA for member countries.
