Crude Oil at $100 per Barrel, Govt May Release Strategic Petroleum Reserves
New Delhi: To check the volatility and price rise of crude oil, India may release crude oil from its SPR (Strategic Petroleum Reserves). The Russia Ukraine war has disrupted global energy prices. Experts are suggesting that crude oil may hit even $125 per barrel later this year.
All major oil-consuming nations have coordinated to subside the crude price rise. On 23 February, White House press secretary Jen Psaki said that a release of reserves was “certainly an option on the table.” Earlier in November last year. US President Joe Biden has said that the US would release 50 million barrels of oil from the SPR in a bid to lower the fuel prices. The US has mentioned that The SPR release from the US will be executed with close coordination with major energy-consuming nations, including China, India, Japan, South Korea, and the UK.
India is the world’s third-biggest oil importer of crude oil and imports over 80% of its oil needs. At present Indian refiners hold crude oil reserves of 64.5 days. In addition to that, India also holds 39.62 million barrels of crude oil through its Strategic Petroleum Reserve body ISPRL (Indian Strategic Petroleum Reserves Limited). Cumulatively at present India has oil storage for 74 days.
In July last year, the Government approved the establishment of two additional commercial-cum strategic facilities with a total storage capacity of 6.5 MT underground storages at Chandikhol (4 MT) and Padur (2.5 MT) under public private partnership (PPP) mode under phase II of the SPR program. When phase II is completed, it will meet an additional 12 days of India’s crude requirement.
Reuters has reported In Aug, 2021 that India has begun selling oil from its Strategic Petroleum Reserve (SPR) to state-run refiners as it implements a new policy to commercialise its federal storage by leasing out space.
Let’s know more about the Strategic Petroleum Reserves :
What is Strategic Petroleum Reserve (SPR)
Strategic Petroleum Reserve (SPR) is kept by the government of a particular country or a private industry, to use in case of any crisis or emergency.
India maintains its petroleum reserves through a Government of India Special Purpose Vehicle called Indian Strategic Petroleum Reserves Limited (ISPRL). ISPRL is a wholly-owned subsidiary of the Oil Industry Development Board (OIDB), which functions under the administrative control of the Ministry of Petroleum and Natural Gas.
Benefits of Strategic Petroleum Reserve (SPR)
Petroleum and Natural Gas Shri Dharmendra Pradhan has told parliament that Govt has filled the SPR Strategic Petroleum Reserves to its full capacity during low crude oil prices in April / May 2020, which resulted in national savings for around 5000 cr.
Countries owning biggest Strategic Petroleum Reserves in world
- US – 714 million barrels
- China – 4000 Million Barrels
- Japan – 314.5 million barrels
- South Korea – 146 million barrels
- Spain – 120 million barrels
Zeenews by Abhishek Sankhyayan, February 27, 2022