India will release five million barrels of crude oil from its strategic reserves in line with other major global energy consumers including US, Japan, South Korea and China, a move aimed at cooling global oil prices. The US is expected to release 50 million barrels of crude oil from its reserves.
This was informed by the Minister of State for Petroleum Rameswar Teli in Rajya Sabha on Monday.
Replying to a question from PV Abdul Wahab, Rajya Sabha member from Kerala, Teli said, “The Government of India agreed to release 5 million barrels of crude oil from its Strategic Petroleum Reserves, in consultation and parallely with other major global energy consumers including USA, People’s Republic of China, Japan and Republic of Korea”.
The minister said the domestic price of crude is linked to international benchmarks of crude prices. These benchmarks get affected by many factors including supply and demand, futures’ trading, impact of the covid scenario and geopolitical situation.
Linear co-relation between pricing and any one of these factors, in isolation, is indeterminable.
He said the government has been consistently reviewing the high petroleum/diesel prices domestically.
With a view to controlling inflationary pressures, the Centre had reduced the Central Excise Duty on petrol and diesel by Rs 5/litre and Rs 10/litre, respectively, on November 3. It was followed by a reduction in VAT on fuel by many state governments.
Five million barrels of crude oil is nearly 13% of India’s strategic oil reserves of nearly 5.40 million tonnes, which is estimated to be 9.5 days of its crude oil requirement.
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(Published 13 December 2021, 16:15 IST)
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