India Retains 60-Day Crude Oil Stockpile, Aims to Expand Energy Reserves

India Prepares for Energy Disruptions Amid Ongoing West Asia Conflict

India has maintained a significant stockpile of crude oil and petroleum products, as well as LPG reserves, in the face of ongoing disruptions caused by the West Asia conflict, which has lasted for over two months. According to Neeraj Mittal, the country's Petroleum Secretary, India has maintained almost 60 days of stock for crude, products, and a month and a half of LPG over the last 67 days.

To mitigate the impact of these disruptions, India has increased procurement from other countries, including existing suppliers. This has allowed the country to maintain a stable supply function in the short term. India has also gotten the highest number of energy ships out of the Strait of Hormuz over the last 67 days. Furthermore, the domestic production of LPG has increased to 50,000 metric tonnes from 30,000 tonnes earlier.

The government is now looking to expand its reserve capacity for LPG, crude oil, and natural gas. Sanjay Khanna, Chairman and Managing Director of Bharat Petroleum Corp, stated that the country can expect to see an expansion in reserve capacity within the next 3-6 months.

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India's Energy Reserves Compared to International Standards

While India has maintained a significant stockpile of crude oil, the country's Petroleum Secretary, Neeraj Mittal, emphasized that having 90 days of crude oil stock, as recognized by the International Energy Agency, would not be economically viable for a country that consumes 5 million barrels per day of oil. Instead, the government is looking for creative ways to utilize its existing reserves, such as trading with other countries.

The government is also working on programs to increase domestic exploration and production of energy resources. A lot of efforts are being made to explore new and larger areas for energy production.

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No Compensation Package for State-Run Oil Marketing Companies

The government is not considering any compensation package for the state-run oil marketing companies (OMCs) for the under-recoveries and losses being made by them on sales of auto fuels and LPG. OMCs are expected to incur losses amounting to Rs 1 lakh crore this quarter due to rising international oil prices and unchanged domestic rates.

The average price at which refiners import oil has increased to $104.68 in May from $69.01 in February before the war broke out, according to data from the Petroleum Planning and Analysis Cell.

In response to concerns over the Prime Minister's comments on saving fuel, the secretary noted that India is well prepared to enter into other energy segments like green hydrogen. Work is in progress for developing LNG trucking, and increasing the ethanol percentage as much as possible in transportation fuels.