India to take appropriate measures, saving Rs 25,000 crore off its crude import bill by stocking Cheap Oil the big ships for the future purpose which will give a green signal to the government fiscal headroom for spending on better public welfare measures needed to tackle the ongoing coronavirus pandemic.
“Our oil companies have procured almost seven million tonne oil at low prices. Almost 20% of our demand has been stored. This has also led to a reduced import bill which will help us free more resources for more public welfare measures” oil minister Dharmendra Pradhan said on Monday.
India’s storage capacity of 38 million tonnes or about 280 million barrels fulfills the annual demand which ranges from 18%-20%. Just a day before the coronavirus pandemic hit economic activities, India’s oil consumption was about 4.5 million barrels on a daily basis.
As the oil prices in February started declining, the petroleum ministry had to seek Rs 3,184 crore in March for buying cheap oil to fill up the remaining capacity in the 5-million-tonne strategic storage.
But things didn’t go as well as anticipated as the demand for petroleum products in India slumped by 70% after the nationwide lockdown began on March 25, which forced the refiners to scale back operations and look at deferring contracted cargos as storage filled up. The situation made the Oil Minister of India call up the counterparts from Saudi Arabia and UAE for discussion on additional oil purchases and contracts for more than seven million tonnes of crude.
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