India to release crude oil from SPR in tandem with US, China, Japan, Korea

• 'This release will happen in parallel and in consultation with other major global energy consumers including the USA, People's Republic of China, Japan and the Republic of Korea'
• 'India strongly believes that the pricing of liquid hydrocarbons should be reasonable, responsible and be determined by market forces'

New Delhi: India has announced its decision to release 5 million barrels of crude oil from its Strategic Petroleum Reserves (SPR) in consultation and tandem with other major global energy consumers in order to cool crude oil prices and send a stern message to the Organisation of the Petroleum Exporting Countries (OPEC) against their refusal to ease supply curbs. In an official statement released on Tuesday, the Ministry of Petroleum and Natural Gas said, "India has agreed to release 5 million barrels of crude oil from its Strategic Petroleum Reserves. This release will happen in parallel and in consultation with other major global energy consumers including the USA, People's Republic of China, Japan and the Republic of Korea."

India has about 38 million barrels of crude oil stored in underground caverns at three locations in the country. 

'India believes crude oil pricing should be reasonable'

In the official statement, the ministry made it clear that the country believes that crude oil prices should be reasonable, responsible and determined by market forces — a sentiment that has been voiced by Petroleum Minister Hardeep Singh Puri on a number energy forums over the past few months. "India strongly believes that the pricing of liquid hydrocarbons should be reasonable, responsible and be determined by market forces. India has repeatedly expressed concern at supply of oil being artificially adjusted below demand levels by oil producing countries, leading to rising prices and negative attendant consequences," said the statement.

Background

Rise in crude oil prices has put inordinate inflationary pressure on the economy by causing retail fuel prices to touch record highs. In a bid to control inflationary pressures, the government had reduced the 'central excise duty' on petrol and diesel by Rs 5 and Rs 10 respectively on November 3. It was followed by reduction in VAT on fuel by many state governments.
    
India's decision to release crude oil from strategic reserves is part of a coordinated effort orchestrated by the US administration to show oil consumers' resentment against OPEC's decision to artificially curb supplies. 

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)