India is preparing huge oil reserves in preparation to take advantage of Crude Oil prices

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Taking advantage of the fall in crude oil prices in the international market, India is preparing to fill its underground reserves. India has prepared a stock of 53.3 lakh tonnes for its emergency needs. These reserves, built at Mangaluru and Padur in Karnataka and Visakhapatnam in Andhra Pradesh, can meet the oil requirement of up to 9.5 days in an emergency. India has increased imports from Saudi Arabia and the UAE to fill these reserves.

Sources connected with the matter say that the reserves of Mangaluru and Padur are half empty, while the reserve in Visakhapatnam is also empty. Currently, these will be filled by purchasing oil from Saudi Arabia, UAE and Iraq. Oil prices have fallen by more than 60 per cent since January, due to reduced demand for oil in the circumstances arising out of Corona and no cut in production from OPEC and other oil producing countries.

Currently crude oil is available at a price of around $ 30 per barrel. Petroleum Minister Dharmendra Pradhan spoke to his counterpart leaders in Saudi and UAE recently to discuss increasing supplies.

India has designed underground storage as a security to avoid a situation of major change in supply or prices. India has allowed foreign companies to keep oil in them on the condition that in case of an emergency, India will be able to use that oil. With this condition, Abu Dhabi National Oil Company (Adnock) has leased 1.5 million tonnes of space in Mangaluru’s storage.

The largest storage is Padur in Karnataka. Its total capacity is 2.5 million tonnes (about 17 million barrels). In this, the government has filled half the storage. To fill the remaining half, oil from Saudi Arabia is being considered. The oil stored in these three storage will be related to the government, but the government is not paying for it at the moment. Government companies Indian Oil, Bharat Petroleum and Hindustan Petroleum have been asked to buy oil from these three Gulf countries and fill these storage. Later the government will pay the companies under this head.

Currently, the Finance Ministry has earmarked Rs 700 crore for this. 1.5 crore barrels of oil is needed to fill the storage of Mangaluru, Padur and Visakhapatnam and will require at least Rs 2,000 crore more.