India to release crude oil from its Strategic Petroleum Reserves to curb rising prices

India to release crude oil from its Strategic Petroleum Reserves to curb rising prices

New Delhi, November 23, 2021

India today said it had agreed to release five million barrels of crude oil from its Strategic Petroleum Reserves to help curb rising oil prices.

This release will happen in parallel and in consultation with other major global energy consumers including the United States China, Japan and Korea, a press release from the Ministry of Petroleum & Natural Gas said.

"India strongly believes that the pricing of liquid hydrocarbons should be reasonable, responsible and be determined by market forces. India has repeatedly expressed concern at supply of oil being artificially adjusted below demand levels by oil producing countries, leading to rising prices and negative attendant consequences," the release said.

The release said Prime Minister Narendra Modi had been consistently reviewing the high petroleum/diesel prices domestically.

The release noted that, in a bid to control inflationary pressures, the Government of India had reduced the Central Excise duty on petrol and diesel by Rs. 5 and Rs. 10, respectively, on November 3. It was followed by a reduction in VAT on fuel by many state governments.

"These difficult steps, despite the high fiscal burden on the Government, were taken in order to provide relief to citizens," the release added.

IANS adds:

India has built strategic petroleum reserves with a capacity to hold 5.33 million metric tonnes (MMT) or 38 million barrels of crude at three locations -- Vishakhapatnam, Mangaluru and Padur (TN). Over 12 per cent of crude stored in the strategic reserves will be released.

Global crude prices have remained firm at around $80 a barrel and had risen to over $85 a barrel last month as oil cartel OPEC showed reluctance to step up production to support demand, and agreed on only measured steps to increase production over the next few months.

NNN

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