(LiveMint)
India will have oil reserves equivalent to at least 87 days of net imports, once the second phase of Indian Strategic Petroleum Reserves, which aims to add 12 days of crude storage, is operational. Strategic crude oil reserves, which are typically state-funded and meant to tackle emergency situations, allow a country to tide over short-term supply disruptions. International Energy Agency (IEA) members maintain emergency oil reserves equivalent to at least 90 days of net imports.
“Creating storage facilities is an important part of India’s energy security efforts,” said petroleum minister Dharmendra Pradhan at the launch of the road show for the second phase in New Delhi that will require an investment of $1.6 billion under the public-private-partnership (PPP) mode. Bids to fill Padur strategic petroleum reserves with 19 million barrels of oil will be invited over the next few months. At a time of growing uncertainty in global oil markets, such reserves will help India to manage supply and price risks as part of its evolving energy security architecture. Abu Dhabi National Oil Co (Adnoc), the state-run oil company of the United Arab Emirates (UAE), is the only one to commit to India’s crude oil reserve programme till date.
“The number of days of reserves will not be a static because as our demand keeps increasing, the number of days of our reserve will also change. In today’s demand scenario, refineries have an inbuilt capacity of 65 days, 10 days have been added under the phase one, with the phase two will be adding 12 days. While IEA’s benchmark is of 90 days, by the time it is completed, the gap may get extended further. We will think of more storage facilities then,” Pradhan said.
