Half of Mangaluru strategic oil reserves to be sold to soften blow of high crude prices
The sale comes on the back of government's decision to liberalise its oil policy by allowing ISPRL to commercialise up to 50% of its reserves
India has begun selling crude oil to its state refiners from its strategic reserves to soften the blow from rising global crude oil prices, at the same time creating space for leasing out to private and international companies, Indian Strategic Petroleum Reserves Ltd (ISPRL), said on Thursday. As much as 0.3 million tonnes of Upper Zakum crude has been emptied already at the Mangaluru cavern and by the end of the year, the remaining 0.45 million tonnes will be emptied.
ISPRL will lease out the 0.75 million ton Mangaluru cavern to state-owned Mangalore Refinery and Petrochemicals Ltd (MRPL).
It said that MRPL has bought the crude the government had stored at Mangaluru at market rate and added that the cavern wants to Saudi crude at Mangaluru SPR.
ADNOC stored upper zakum crude at Mangaluru
Having a capacity of 0.75 million tonnes capacity, the Mangaluru strategic petroleum reserve (SPR) has two caverns. In the second cavern at Mangaluru, Abu Dhabi National Oil Company (ADNOC) of the UAE has stored upper zakum crude. Around 0.15 million tonnes of crude oil has been sold to HPCL, from the Vizag cavern.
The sale comes on the back of government’s decision to liberalise its oil policy by allowing ISPRL to commercialise up to 50% of its reserves, earlier this year. Out of this 50%, ISPRL can use 20% of the volumes for trading and lease out the remaining 30% of the capacity.
The government had purchased crude, when international oil prices had crashed in April and May 2020 to $19 per barrel and is making a profit on selling it when prices increased to $80.