India has filled a little over one-third of its phase 1 ‘strategic oil reserve’ at a cost of Rs 4,258 cr, about $640 mln.
The country is in the process of building five underground reserve facilities for crude oil totaling 110 million barrels (15.3 million tons) of storage capacity.
Out of these, two tanks — at Vishakhapatanam and Mangalore — are operational, while those at Padur, Chandikhol (in Orissa) and Bikaner in Rajasthan are either at the initial stages or being constructed.
At given crude oil prices, the 4,258 cr would have bought about 13 mln tons of crude oil — or about a third of the 38 mln tons of reserve planned in the phase 1 facilities. Phase 1 facilities comprise the tanks at Vishakhapatanam, Mangalore and Padur.
As of now, the entire Vishakhapatnam storage facility and half of Mangaluru facility have been filled, the oil ministry said today.
Out of these, the Mangalore facility was filled using oil sourced from Iran at cost of Rs 1,737 cr, while the remaining half of the cavern will be filled by oil sourced from the Abu Dhabi National Oil Company.
The cost of filling the Vishakhapatanam facility was 2,521 cr.
India consumes half a million tons, or about 3.07 mln barrels of crude oil per day.
When fully ready, the 15.33 mln tonnes of reserves will be enough to meet the country’s needs for about one month and will store about 109 million tons of crude oil.
The biggest strategic oil reserve is in the US and has a capacity of 727 million tons. It was set up after Arab countries stopped exporting oil to the United States for its support to Israel in the Yom Kippur war.
Strategic reserves are built up as a fallback during times of war, when regular supplies are disrupted.
India depends on imports for around 85% of its crude oil needs.
In addition to the strategic reserve, India has another two months worth of ‘oil in the system’ in the form of non-strategic storage.