India has consented to release nearly five million barrels of crude oil from its Strategic Petroleum Reserves (emergency stockpile) in tandem with the United States, Japan, People’s Republic of China, the Republic of Korea, and other significant economies to moderate costs, the government said in a statement on November 23.
India collects around 38 million barrels of crude oil in underground caverns at three places on the east and west coast.
Out of this, nearly 5 million barrels will be released, beginning as early as 7-10 days, the official, who wished to be anonymous, said. The stocks will be traded to Mangalore Refinery and Petrochemicals Ltd (MRPL) and Hindustan Petroleum Corp Ltd (HPCL), united by pipeline to the strategic reserves.
Though the release of 5 million barrels of crude is roughly similar to less than half of India’s daily domestic consumption, it is regarded as symbolic progress as oil customers are ready to come together against OPEC’s reign over markets.
“India strongly believes that the pricing of liquid hydrocarbons should be reasonable, responsible and be determined by market forces,” the government release said. Apart from this, the government said that it has repeatedly expressed concern about the supply of oil being artificially adjusted below demand levels by oil-producing countries, leading to rising prices and negative attendant consequences.
Prime Minister Narendra Modi has constantly been evaluating the high petroleum/diesel prices in the nation. In an effort to manage inflationary tensions, the central government on November 3 decreased the central excise duty on petrol and diesel by Rs 5 and Rs 10, individually. A decline resulted in VAT on fuel by various state governments. Despite the high fiscal burden on the government, these complex steps were exercised to grant comfort to citizens, the statement added.