Thousands of crores of rupees saved: India fills strategic reserves to full capacity with cheap crude oil

By: |
Published: June 4, 2020 11:06 AM

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.

strategic reserve, strategic oil reserve, crude oil, cheap crude oilOut 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.

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.

 

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.

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Shivraj Chouhan seeks GI tag for Madhya Pradesh’s Basmati rice; meets Union agriculture minister
2Current economic scenario in India as well as global markets is challenging: Chandrasekaran
3Govt not considering merger of CBDT, CBIC: FinMin