India proposes to re-evaluate its plan to store its strategic oil reserves in facilities available in the US as the country looks to bolster domestic storage that is considered a safer and better option to deal with excess price volatility and supply disruptions.
Petroleum Secretary Tarun Kapoor told IANS in an interview that though offers from the US for storing India’s strategic oil reserves is available, it will have to be seen whether it serves the national interest.
“The US offer is for using their salt caverns to store India’s strategic oil reserves. This form of storage allows extraction of oil only once in five years. So, it creates limitations in using this overseas strategic oil in times of exigencies. The US offer is there but we have not taken a call on it,” he said.
India has built strategic oil reserve capacity of 5.33 million tonnes (MT) at three locations in southern India — Visakhapatnam, Mangaluru, and Padur. But the reserve is still very small as even at full capacity it would meet the country’s import substitution of just nine days, which is considered too low.
Last year, India indicated its plan to build a portion of its strategic oil reserves in the US to take advantage of low oil prices quickly and thus scale up its strategic oil reserves to meet 100 days of requirements