In the wake of ongoing Russian-Ukraine conflict, India is seriously contemplating releasing its Strategic petroleum reserves to minimize the impact of the recent steep rise in crude oil in the International Market that has reached its all time high since 2014.
Crude oil prices which were hovering between USD 60 to 80 a barrel for the past one year has crossed USD 103 a barrel after Russia invaded Ukraine last week.
According to sources, the decision to release strategic reserves would be taken in the coming weeks if the Russian-Ukraine tension does not escalate any further.
India had formed Indian Strategic Petroleum Reserve Ltd (ISPRL) Company in 2005 with an objective to maintain an emergency fuel reserve of 5.33 Million Metric tons (MMT) to ensure emergency fuel reserve for 10 days. Last year, it also initiated the process to build another strategic reserve of 4 MMT with an investment of Rs 10,000 crore at Chandikhole in Odisha.
The Idea behind preparing a strategic oil reserve is to stock crude oil when it is at its low in the International Market, and use it domestically when the prices are high in the international market or in case the country faces any emergency situation.
“Government is closely monitoring the global energy market, its petroleum price volatility, possibilities of supply disruptions due to the evolving geopolitical situation and would take appropriate decisions as and when required to minimize the volatility in the domestic market,” said a senior officer of the Union Petroleum Ministry here on Monday.
However, no final decision has been taken yet. Meanwhile, the Ministry has also told the ethanol producing companies to speed up India’s alcohol-blending target. India has set a target to meet 20% ethanol blending by 2025 that could save more than Rs 30,000 crore foreign reserve. Presently India has increased its domestic ethanol production from 200 crore litre in 2014 to 700 crore litre reveals a recently released report of the Niti Ayog.