India allocates $388 mln in FY15 budget to fill oil storage
India is building storage facilities at three locations in the south of the country to hold a total 36.87 million barrels of oil
New Delhi: India has provided ₹ 2,400 crore (about $388 million) in the revised budget estimates for the current fiscal year to fill its first strategic crude reserves, a government statement said on Monday, indicating oil could be purchased by end-March.
A fall in oil prices helped finance minister Arun Jaitley to present a budget that loosened the reins on public spending to drive growth as the federal government could save billions of dollars in oil subsidy.
India, the world’s No.4 crude consumer, is building storage facilities at three locations in the south of the country to hold a total 36.87 million barrels of oil, enough to cover about 13 days of its needs in case of a supply disruption.
The first underground facility at Vizag that can hold 9.75 million barrels is completed and ready for commissioning.
The Vizag facility has two compartments of 7.55 million barrels and 2.20 million barrels. The smaller compartment will be used by Hindustan Petroleum Corp. Ltd for its 166,000 barrels-per-day Vizag refinery in Andhra Pradesh.
With global oil prices trading at around $62.2 per barrel, it would cost around $470 million to fill the bigger compartment at Vizag.
The remaining two strategic storage facilities at Padur and Mangalore in southern Karnataka state that can together hold 29.3 million barrels are expected to be ready by October.
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