NEW DELHI, India’s strategic petroleum reserves can last 74 days to meet demand arising from any global turbulence, Oil Minister Hardeep Singh Puri told the Rajya Sabha on Monday.
India’s petroleum reserves can last 74 days in case of global unrest: Oil Minister PuriResponding to supplements during the question and answer session, the minister said that for any country like India, which is growing at an unprecedented pace, there must be a very effective and secure reserve, so that it is not in a vulnerable situation in case of global unrest.
He said India has several refineries on both the west coast and the east.
“According to the International Energy Agency, today we are the third largest consumer of crude oil in the world. We have the fourth largest refining capacity in the world – currently running about 260 million metric tons per year with 320 million metric tons annually. And, we are the fifth largest exporter of petroleum products in the world.
“The strategic petroleum reserve is designed to ensure that in the event of an entire global crisis, we have enough stocks to meet our needs. The IEA stipulates that a strategic petroleum reserve should be held for about 90 days,” the minister said.
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Today, he says, “We count our reserves not only in caves but also in our refineries. Our reserves in caves are in Andhra Pradesh and Karnataka and we hope to start in Odisha soon.”
“At the same time, if you look at our reserves in caves and what we have in our ports and our products near our refineries and our floating platforms, it comes in 74 days. Ideally, it should be 90 days. I feel safe with something in 74 days as a minister. But, we can consider taking it forward,” said Puri.
“Overall, the Strategic Petroleum Reserve is a very important component of economic stability. It’s a very important component of our energy security,” he told the House.
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In a written reply to questions, the minister said, “The government, through a special purpose vehicle called Indian Strategic Petroleum Reserve Limited, has set up strategic petroleum reserve facilities at 3 locations in Andhra Pradesh and Karnataka with a total capacity of 5.33 million metric tonnes of crude oil.
“Currently, ISPRL has about 4.094 MMT of crude reserves which is about 77 percent of the total storage capacity. Of the total storage capacity, 50 percent is used for ISPRL commercial operations.
“Since the first purchase of crude oil to replenish reserves in 2015, crude oil prices have fluctuated from a high of USD 80.08 per barrel in October 2018 to a low of USD 19.90 per barrel in April 2020 to a high of USD 19.90 per barrel during the Covid period,” as high as $720,112 in March.
Taking advantage of lower crude oil prices in April/May 2020, strategic petroleum reserves were filled to full capacity, resulting in near notional savings. ₹5,000 crores. He said in his written reply that the weighted average procurement cost of crude oil filled with SPRs from government budgetary support is still half of the current prevailing crude oil prices.
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