India saved Rs 5,000 crore in foreign exchange while strengthening its energy security by filling the strategic reserves to full capacity with cheap crude oil.
A major fall in the international crude oil prices has helped India save thousands of crores of rupees by filling its strategic reserves at low cost. The country has saved Rs 5,000 crore in foreign exchange while strengthening its energy security by filling the strategic reserves to full capacity with cheap crude oil, the Ministry of Petroleum and Natural gas said in a tweet. Out of the proposed strategic reserve of 6.5 MMT, India has commissioned 6.33 MMT of strategic oil reserves so far in Vishakhapatnam, Chandikhole, Padur, and Mangalore. Crude oil holds the largest share in India’s overall imports, thus, cheaper oil dramatically cuts down the country’s import bill and current account deficit.
The PSU oil firms were asked to import oil in the month of April when the crude prices were at a decades-low level. the crude oil prices fell to around $20 per barrel in the month of March. Also, WTI futures crashed to below $5 per barrel level in April 2020.
Recently, India has also signed a Memorandum of Understanding with Saudi Aramco for filling the cavern in Padur, the ministry informed. Further, the ministry said that bilateral relations between India and the UAE are going through a golden era and the UAE was committed to India’s energy security despite supply disruptions due to the gulf crisis in September 2019.
Strengthening India’s energy security and taking advantage of low crude price due to #Covid19 situation, India filled its strategic petroleum reserves to its full capacity, resulting in forex savings of ₹5000 crore to the exchequer.#1YearOfModi2#72MonthsOfTransformingIndia pic.twitter.com/HDpWw6EyPz
— Ministry of Petroleum and Natural Gas (@PetroleumMin) June 3, 2020
Meanwhile, the government said that the sourcing of crude and LNG has been further diversified to strengthen India’s energy security. First Russian cargo of 2 million barrels of Urals grade oil under IOCL and Rosneft’s contract was received by IOCL at Paradip on April 8, 2020, the ministry confirmed.