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- Petroleum Minister: Fuel Reserve For 1 Month If Supply Stops; Boost Oil Research Investment
New Delhi1 hour ago
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On Monday (June 8), two separate statements came from the Petroleum Ministry and Union Petroleum Minister Hardeep Singh Puri on petrol and diesel, which shows that there is fuel stock in the country, but prices may increase.
On one hand, Union Minister Puri said that India currently has a fuel reserve equal to 76 to 80 days of consumption by including its strategic petroleum reserve, refinery stock and commercial stock.
He said that despite the increasing tension between America and Iran in the Middle East, the country’s oil supply is completely secure and the prices of crude oil in the global market will not remain at high levels for very long.
On the other hand, Petroleum Ministry’s Additional Secretary Praveen Khanuja also told in a press briefing that apart from LPG, oil companies are currently facing under-recovery (loss) of Rs 30 per liter on diesel and Rs 6 per liter on petrol. Due to this, companies are facing losses of around Rs 600 to 700 crore every day.
Challenges may change due to long term war
Hardeep Singh Puri also acknowledged that the challenges could change if the ongoing conflict in the Middle East drags on longer than expected. Short-term disruptions will be handled by the country through its reserves and alternative sources, but a much longer-lasting crisis could have a cascading effect on global energy markets.
However, state oil companies are planning to significantly increase drilling activities domestically for long-term security so as to reduce dependence on external shocks.
Capable to withstand 30 days of crisis even if the Strait of Hormuz is closed
The Petroleum Minister has clarified the situation on the fears of closure of ‘Strait of Hormuz’, the most important route of global oil supply. He said that due to the stock available with India and alternative sourcing (supply) arrangements, the country is capable of dealing with any temporary disruption. Even if this sea route is closed for about 30 days, India can handle this situation very easily.
Strong cover of 60 days for crude oil, natural gas and LPG is available.
Hardeep Singh Puri said that his priority is to maintain the stock cover of crude oil, natural gas and LPG in the country for at least 60 days. India is currently meeting this threshold and is in a very comfortable position. The government has already started working on the strategy of diversifying its supply system.
Additional help will be provided from countries like Mozambique and UAE
According to the Petroleum Minister, producing countries outside the Gulf region will meet the global oil shortage. He said that the additional gas supply coming from Mozambique will further strengthen India’s energy security.
Apart from this, talks have been held with the authorities of United Arab Emirates (UAE) to secure additional LPG cargo if needed, so that India can get the necessary help in times of crisis.
Capacity of 24 refineries is India’s biggest strength.
The minister said India’s energy security framework is not limited to strategic petroleum reserves, but also includes the inventory held by refiners and fuel retailers. There are currently 24 refineries operating in the country and the government is continuously increasing its refining capacity.
This refining capacity emerges as India’s biggest strength during the fluctuations in the global market. The country’s energy companies also believe that any short-term crisis can be easily managed.
Rejected the allegations of not filling the reserve at low price
The minister rejected criticism of India not adequately replenishing its reserves after the pandemic when crude oil prices were extremely low. He argued that management of fuel stock is an ongoing process, which involves continuously replenishing the stock and exploiting it commercially. Crude oil cannot simply be stored indefinitely; Inventory is actively managed based on market conditions and consumption needs.
LPG connections increased from 14 crores to 33 crores.
To strengthen the country’s energy infrastructure, expenditure on LPG storage capacity and domestic oil exploration has been significantly increased.
In the year 2014, there were about 14 crore LPG connections in the country, which has now increased to more than 33 crore. Apart from this, investment in various domestic exploration projects including Andaman Basin has been intensified.
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Only 4 subsidized cylinders will be available in the Ujjwala scheme: Till now 9 cylinders were given, the effect of increase in LPG prices in the international market by 46%.
Beneficiaries of Ujjwala Yojana (PMUY) will now get an extra discount of Rs 300 only on the first 4 subsidized LPG cylinders instead of 9 in a year. This amount is directly credited to the bank account of the beneficiaries.
Additional Secretary of the Petroleum Ministry, Praveen Khanuja, said on Monday that this decision has been taken due to the increase in international LPG prices by 46% due to the ongoing war between America and Iran. Read the full news…
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