In news- Recently, India, the world’s third-largest oil importer, has agreed to release 5 million barrels of crude oil from its strategic reserves (about 12.8 percent of 5.33 million tonnes of crude oil reserves) as part of a coordinated move along with the US, China, Japan and South Korea aimed at lowering international prices.
About Indian Strategic Petroleum Reserves-
- India has an existing crude storage capacity of 5.3 million tonnes (mt), including 1.33 mt in Visakhapatnam, 1.5 mt in Mangalore and 2.5 mt in Padur(near Udupi).
- Built at a cost of $600 million, these reserves are operational and are sufficient to meet around nine-and-a-half days of India’s crude oil requirements.
- India is dependent on imports to meet 85% of oil demand and 55% of natural gas requirements.
- OPEC accounts for a majority of India’s crude oil imports and around 40% of global production.
- These strategic storages would be in addition to the existing storages of crude oil and petroleum products with the oil companies and would serve as a cushion during any supply disruptions.
- The construction of these Storage facilities is being managed by Indian Strategic Petroleum Reserves Limited (ISPRL),.
- ISPRL is a Special Purpose Vehicle, which is a wholly owned subsidiary of Oil Industry Development Board (OIDB) under the Ministry of Petroleum & Natural Gas.
- Engineers India Limited (EIL) worked as the Project Management Consultant for the three locations.
- The crude oil storages are constructed in underground rock caverns and are located on the East and West coast of India as rock caverns are considered as the safest means of storing hydrocarbons.
Other countries with the SPR-
- Besides the United States, the other 29 member countries in the International Energy Agency (IEA), including the United Kingdom, Germany, Japan, China and Australia , are required to hold oil in emergency reserves equivalent to 90 days of net oil imports.
- Japan has one of the largest reserves after China and the United States.
- As per IEA, there are typically three ways to maintain SPR levels to meet the 90-day requirement:
- Commercial stocks held by refiners.
- Held by the government.
- Agency stocks.
- The stockholding structure is peer-reviewed every five years among members.
Source: The Indian Express
