Government to Release 5 Million Barrels of Oil from its Emergency Reserve
To deal with rising crude oil prices, India will release 5 million barrels from its strategic (emergency) petroleum reserve. America has made a plan to release an emergency stock of crude oil in collaboration with some big economic countries including India, Japan. With this move, the prices of petrol and diesel may come down a bit. In a statement issued by the Ministry of Petroleum and Natural Gas, it has been said that the price of liquid hydrocarbons should be reasonable and determined by the market forces. Oil supply is being deliberately kept below the level of demand by oil-producing countries.
India has been repeatedly expressing its concern about this. Crude oil prices have jumped due to the short supply of oil-producing countries. The statement said that India has agreed to release 5 million barrels of crude oil from its strategic petroleum reserve. It will be released in consultation with other major global energy consumers including the US, China, Japan and Korea.
Prices may come down by 2 to 3 rupees per litre
According to Ajay Kedia, director of Kedia Commodity, if the petroleum companies pass on the benefit of falling crude oil prices to the common people, then the prices of petrol and diesel can be reduced by 2 to 3 rupees per litre. However, if the rupee weakens against the dollar in the coming days, it will be difficult for the prices to come down. Crude oil is currently trading around $80 per barrel.
Strategic Oil Reserve is being released
Energy expert Narendra Taneja said that the Strategic Oil Reserve is being released to increase the supply of oil in the market. America, India, South Korea and Japan are trying to bring crude oil prices to $ 70 per barrel. China has also made preparations to release oil from the strategic reserve. If the price of crude comes down to $ 70, then obviously Indian customers will also get the benefit in the form of lower prices of petrol-diesel and LPG.
Oil to be sold to MRPL and HPCL
India has a stock of about 38 million barrels of crude oil at three locations on the East and West Coast. Of this, 5 million barrels will be released. The stock will be sold to Mangalore Refinery and Petrochemicals Ltd (MRPL) and Hindustan Petroleum Corp Ltd (HPCL). Both these refineries are connected to the Strategic Reserve through a pipeline. A government official said that more stocks may also be released later.
OPEC+ did not listen to Biden
Recently, US President Joe Biden asked the Organization of Petroleum Exporting Countries Plus (OPEC +) to increase the supply of crude oil. He cited the increased demand after the corona epidemic subsided behind it. OPEC+ ignored Biden's point. After this, the Biden administration has made a plan to release oil from the Strategic Oil Reserve with other countries. In this way, countries will be releasing oil together for the first time in history.
OPEC and OPEC+ countries
Apart from OPEC countries, the countries which export oil are called OPEC+ countries. OPEC+ includes 10 countries including Russia, Oman, Mexico, Malaysia. At the same time, there are 13 countries in OPEC including Iran, Iraq, UAE and Saudi.