Mangaluru: Centre taps into strategic oil reserves to ease impact of global crude price rise?

Mangaluru: The central government has started to tap into its strategic reserves to ease the impact of the global crude oil price rise. The petroleum stored in these facilities is being sold to government-owned oil refineries.

H.P.S. Ahuja, who is the chief executive officer of the Indian Strategic Petroleum Reserves Ltd (ISPRL), said that the company has already disposed of the entire stock of three lakh tonnes of crude oil in one of its facilities. The remaining stock of 4.5 lakh tonnes will also be sold soon, he added.

Elaborating on the details of the recent transactions, Ahuja said, 0ne of the two oil storage facilities here will be leased to Mangalore Refinery and Petrochemicals Ltd. (MRPL). MRPL will use this facility to store crude it imports from Saudi Arabia.

Another 1.5 lakh tonnes of crude stored at the Vishakhapatnam facility has been bought by another public sector company, the Hindustan Petroleum Corporation Ltd.

For ensuring the energy security of the nation, the Government of India had decided to set up massive underground storage facilities of 5 million metric tons (MMT) capacity at three locations namely, Visakhapatnam, Mangaluru, and Padur (near Udupi). These strategic storages, which added to the existing storages of crude oil and petroleum products, were aimed as a cushion during any supply disruptions.

The government had procured crude in the two oil storage facilities of ISPRL here when the price per barrel touched a  low of $19. With the crude touching $80 in the international markets recently, the government has made handsome profits on its investments in the strategic reserves.