Minister of Petroleum and Natural Gas Dharmendra Pradhan today said that the government is exploring overseas crude storage facilities in the US and other commercially viable locations. Speaking at the ‘GCTC Energy Security Conference 2020’, Dharmendra Pradhan added that taking the advantage of low crude oil prices in April and May 2020, India filled the existing strategic petroleum reserves with 16 million barrels of crude oil, resulting in saving Rs 5,000 crore for the government. The minister further invited the participation of companies in the development of 6.5 MMT of crude storage capacities at Chandikol and Padur in the next commercial-cum-strategic reserve programme, according to the Ministry of Petroleum & Natural Gas.
India’s dependence on oil imports
During 2019-20, the consumption of petroleum products was 213.7 MMT and the percentage of import dependency of oil and oil equivalent gas was 77.9 per cent, the petroleum minister had said in Lok Sabha. In an effort to strengthen energy security in the hydrocarbons sector, the country is gradually improving crude and petroleum products’ storage capacity from the existing 74 days of national consumption to 90 days. The move is made to cut India’s import dependency for hydrocarbons. Given a significantly low domestic production against the country’s overall production, India began importing crude oil from the US in 2017 to diversify import basket beyond the OPEC nations.
India eyes the US for oil imports, now for storing oil
In recent years, India has substantially increased its oil imports from the US. US oil supplies to India have jumped ten-fold to 2,50,000 barrels per day (bpd) in the last few years, visiting US Energy Secretary Dan Brouillette said earlier this year. US President Donald Trump had also mentioned that Indian imports of US oil were 25,000 bpd a couple of years ago, and have now risen to 2,50,000 bpd. At present, the US is the sixth-largest oil supplier for India.
Meanwhile, Dharmendra Pradhan underlined that the oil & gas sector PSUs alone will have capital expenditure spending of Rs 1.2 lakh crore in 8,363 projects/economic activities during the current financial year. Other ministries in the energy sector also have similar ambitious Capex spending projects, to help boost employment and economic growth, he added.