Retail petrol and diesel prices shot up to record levels earlier this month before the government cut taxes, costing it Rs 60,000 crore in revenue this year.
India is working on ways to release crude oil from its strategic storages in tandem with other major economies to dampen prices, a top government official said on Monday. The US had last week made the unusual request to some of the world’s largest oil-consuming nations, including China, India and Japan, to consider releasing crude stockpiles in coordinated effort to lower global energy prices.
This after members of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies rebuffed repeated requests to speed up their production increases.
“We are working on releasing stocks from our strategic reserves,” the official, who wished not to be named, said.
He did not give a timeline but said officials were in touch with other major oil users for a coordinated move. India is the world’s third-largest oil consumer and importing nation and has been severely impacted by the relentless rise in international oil prices. Since the US move, global oil prices are on the decline. Brent crude was trading at USD 78.72 per barrel, down from USD 81.24 a barrel 10-days back. On October 26, it had hit a multi-year high of USD 86.40.
Just like the US, it also believes that high prices are starting to produce unwanted inflation and undermine recovery from the COVID-19 pandemic. Retail petrol and diesel prices shot up to record levels earlier this month before the government cut taxes, costing it Rs 60,000 crore in revenue this year.
India has 5.33 million tonnes of underground crude oil storage at two places on the east and the west coast.
While China has said it is working on a crude release, Japan has also signalled its readiness. India has built 1.33 million tonnes of storage at Visakhapatnam in Andhra Pradesh, and 1.5 million tonnes at Mangaluru and 2.5 million tonnes at Padur (both in Karnataka).
The official said the stocks from the reserves will be released in tandem with other countries. “Dates, etc are being worked out,” he said.
ADNOC of UAE has leased half of the Mangalore storage while the remaining is with state-owned Mangalore Refinery and Petrochemicals Ltd (MRPL). State-owned firms and government have stocked oil at the other facilities.