Rs 4,948 cr allocated for reserve crude

Rs 4,948 cr allocated for reserve crude

Taking advantage of lower oil prices, the Centre on Tuesday allocated Rs 4,948 crore to fill India's maiden strategic oil reserves to insulate itself from supply disruptions.

“Rs 4,948 crore allocation for Gross Budgetary Support (GBS) to the scheme for the Indian Strategic Storage Programme for storage of crude oil by Indian Strategic Petroleum Reserves Ltd (ISPRL) as been approved." This money would be used to buy crude to fill up the just completed Visakhapatnam (Vizag) storages”, Telecom Minister Ravi Shankar Prasad told reporters after the meeting of Cabinet Committee on Economic Affairs.

Underground storages are being built at Visakhapatnam in Andhra Pradesh and Mangalore in Karnataka and Padur near Chennai to store about 5.33 million tonnes (28 million barrels) of crude oil. This is enough to meet nation's oil requirement for 11 days.

Indian Oil Corp (IOC) this week already bought two ship loads of Iraqi crude to fill this storage and the Cabinet sanction would allow payments to be made for the purchase.

Visakhapatnam facility would have storage capacity of 1.33 million tonne, Mangalore have capacity of  1.50 MT and Padur near Chennai have capacity of 2.2 MT. The Vishakhapatnam rock cavern storage facility is ready to receive crude oil, while the two other facilities at Mangalore and Padur are likely to ready by October, 2015.

The storage is being built to facilitate in dealing with the situation of any disruption in the supply chain of crude oil and abnormal spike in world oil prices, said the statement.

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