How is India taking advantage of falling crude oil prices?
Team Udayavani, Apr 16, 2020, 3:36 PM IST
Due to the demand crisis in the global market, crude prices are low and India being world’s fourth biggest oil consumer, is stacking up crude oil for the future and also extending its support for global efforts to rescue the energy market.
Although, the purchases are made to take advantage of low prices. But officials claim that it is also a signal of solidarity for the campaign to stabilize markets.
Reduction in crude prices will not only lower the import bill but also help save foreign exchange. Also, the sectors that will have a positive impact due to falling oil prices will be automobiles, plastic industries including pipes, chemicals and resins and footwear manufacturers.
The Indian government has set up nearly 5 million metric tons of strategic crude oil storages at three locations that are Visakhapatnam, Mangalore, and Padur.
Mangalore storage has a total capacity of 1.5 million tonnes, out of which half had previously been hired by Abu Dhabi National Oil Co to store its crude oil. The remaining half is now being filled by oil brought by state-owned oil firms.
Padur is the biggest of the three storages, it has a total capacity of 2.5 million tonnes which is about 17 million barrels. At present, half of the Padur capacity is filled with government-sourced crude and remaining 1.25 million tonnes of crude oil is now being sourced from Saudi Arabi.
The 1.33 million tonne Visakhapatnam storage has a small amount of space which will be filled with Iraq crude oil.
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