India looks to save Rs 25,000 crore by stocking cheap oil
India is looking to shave Rs 25,000 crore off its crude import bill by storing cheap oil in ships for future use, allowing the government fiscal headroom for spending on more public welfare measures needed in its fight against the coronavirus pandemic.
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 reduced import bill which will help us free more resources for more public welfare measures.
India’s storage capacity stands at 38 million tonne, or about 280 million barrels. This is the same as 18%-20% of annual demand. India’s daily consumption of oil stood at about 4.5 million barrels a day before the coronavirus pandemic hit economic activities.
But the situation soon went for a toss as India’s demand for petroleum products tanked 70% after the countrywide lockdown began on March 25, forcing refiners to scale back operations and look at deferring contracted cargos as storages filled up.