New Delhi: India is planning to fill its strategic petroleum reserve by the third week of May by moving 19 million barrels into the sites, the Managing Director of ISPR (Indian Strategic Petroleum Reserve) said on Tuesday. The news comes as India is now under a prolonged lockdown until May 3 and the demand for petroleum products has hit an all-time low.
"As of now, the plan is to fill the caverns by (the third week of May), before the arrival monsoon rains. We are buying oil from state refiners," ISPR MD HPS Ahuja said. ISPRL is responsible for building and filling of SPR sites. "We are taking advantage of low oil prices," he said, adding that most of these cargoes are linked to official selling prices for April.
Moving crude oil to the strategic petroleum reserve will help Indian refineries to reduce their excess crude which has been building in the wake of a sharp fall in demand. In March, India's fuel demand declined by 17.8 percent, the lowest in over two decades.
India will be diverting cargoes for loading in April that have already been bought by IndianOil, Bharat Petroleum, HPCL and Mangalore Refinery and Petrochemicals Ltd. The refiners cut their throughput after domestic fuel demand collapsed. They have also replenished their storage and are now unable to store crude.
ISPR wants to receive the cargoes before monsoon begins in May as the single point mooring system that can unload VLCC (very large crude carriers) at the port of Mangalore, which will feed two strategic petroleum reserve sites, is shut for three months in the rainy season. Union Petroleum Minister Dharmendra Pradhan had on April 13 instructed ISPR to augment storage of crude oil in the strategic reserve to gain from low crude prices.
Ahuja said that ISPR is hoping to receive the last crude oil cargo on May 21, while IndianOil supplied a VLCC containing oil from the UAE on April 13. India has three strategic crude oil storages in Visakhapatnam, Mangalore and Padur (near Udupi). They can store up to 37 million barrels of oil, equivalent to about 9.5 days of India's oil demand. A portion of the strategic petroleum reserve is already filled.