India saved Rs 5,000 cr by filling its strategic reserves with low-priced crude oil: Pradhan

• India purchased 16.71 million barrels (mbbl) of crude in April-May, 2020 and filled all the three Strategic Petroleum Reserves, said Pradhan

• The minister said that the average cost of procurement of crude oil was $19 per barrel in April-May as opposed to $60 per barrel earlier in January this year

New Delhi: Union Minister for Petroleum and Natural Gas Dharmendra Pradhan said that India saved Rs 5,000 crore in April-May when the country made use of the historical fall in global crude oil prices and filled up its strategic crude oil reserves. India, the world's third-biggest oil importer, has built strategic storages in underground rock caverns at three places to meet any contingency, said Pradhan in a written response in Rajya Sabha on Monday.

"Taking advantage of the low crude oil prices in the international market, India purchased 16.71 million barrels (mbbl) of crude in April-May, 2020 and filled all the three Strategic Petroleum Reserves created at Visakhapatnam, Mangalore, and Padur," Pradhan told the Upper House of the Parliament.

Average cost of procurement of oil crude oil was $19 per barrel: Pradhan

The minister said that the average cost of procurement of crude oil was $19 per barrel in April-May as opposed to $60 per barrel earlier in January this year. This helped save $685.11 million or Rs 5,069 crore, he said. The strategic crude oil reserves of India have a total capacity of 5.33 million tonnes, enough to meet India's needs for 9.5 days.

Also read: OMCs delivered 13 crore LPG refills under Ujjwala in April-August period: Pradhan

The backdrop

Oil prices fell sharply to a two-decade low in April-May after the Coronavirus pandemic hit demand. At the time, the strategic reserves in Mangalore and Padur were half-empty and there was some space available in the Vizag storage as well. These were filled up by buying oil from Saudi Arabia, UAE and Iraq. 

India meets 85 percent of its oil requirement through imports. The state-run refiners maintain 65 days of crude storage, in addition to the storage maintained by the strategic reserves. Together, India has enough crude oil in storage to meet demand for about 87 days.

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