India’s strategic crude oil reserves will be full by mid-May, petroleum minister Dharmendra Pradhan told Daniel Yergin, vice-chairman, IHS Markit.
India, the world’s third largest crude oil importer, has a storage capacity of 5.3 million tonnes (mt) -- 1.33 mt at Visakhapatnam, 1.5 mt in Mangaluru and 2.5 mt at Padur -- , which can support 9.5 days of net imports. Besides, the government has approved the construction of an additional 6.5 mt of storage—4 mt at Chandikhol, Odisha, and another 2.5 mt in Padur, Karnataka.
“India has 5.3 million metric tonnes of strategic storage capacity. By mid-May it will be full. Besides, our companies have 7 million mt of floating oil in their contracts. We have purchased them," he added.
Pulitzer prize-winning American author Daniel Yergin has been attending Prime Minister Narendra Modi’s meetings with global oil and gas industry representatives.
“Apart from that, with our domestic online capacity in crude oil or products we have storage of 25 million mt. Put together, we have nearly 38 million mt of product and crude oil storage facilities. This is 18% of our annual energy requirement. This is the maximum capacity we can hold and we are holding that," Pradhan said.
Strategic crude oil reserves, which are typically state-funded and meant to tackle emergencies, allow a country to tide over short-term supply disruptions. International Energy Agency members maintain emergency oil reserves of at least 90 days of net imports.
India will have oil reserves equivalent to at least 87 days of net imports, once the $1.6 billion second phase of Indian Strategic Petroleum Reserves (ISPR) programme, which aims to add 12 days of crude storage, is operational. These facilities together will help support 22 days of India’s crude oil requirements. Indian refiners also maintain 65 days of crude storage, taking the total tally to 87 days.
This comes in the backdrop of extremely low global crude oil prices.
“India is a major consumer. But at this juncture, India’s viewpoint is price should be reasonable and responsible. Very low prices are not the answer. Reasonable prices are the answer. Prices should give some space to the producer countries. It should be profitable for them; it should be viable for them," Pradhan said according to a statement.