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As crude oil prices hit fresh lows, India is building its strategic petroleum reserves of 5.33 million metric tons (MMT).
Around half of this capacity is full, a source told the paper. The total capacity is expected to meet the country’s requirements for about 9.5 days. However, with the coronavirus outbreak restricting the movement of men and material, the stock could last much longer. This stock will be in addition to the 64.5 days stock that domestic refiners typically maintain.
India recently purchased crude oil worth Rs 690 crore, an official told Hindustan Times.
“Average price of the contracted quantity of crude is around $30 per barrel,” another official told the publication. This is much lower than India’s average crude oil purchase price of $69.88 per barrel in 2018-19.
The report added that the government approved the construction of facilities at Chandikhol in Odisha (4 MMT) and Padur in Karnataka (2.5 MMT), which will provide additional crude oil storage for 11.57 days.
The government might also purchase oil from Saudi Arabia and Abu Dhabi, the report added.
“Talks are on with Saudi Arabia and we are awaiting a final nod from Riyadh,” the second official said.
India, which imports over 80 percent of its oil requirement, is trying to boost its capacity as it prepares to keep vehicles running during the coronavirus, or COVID-19, outbreak.
Moneycontrol could not independently verify the story.