Mumbai: India has bought the first oil for its strategic petroleum reserve (SPR), in the form of a 2m barrel cargo of Iraqi crude from Chinese trader Unipec. This marks the start of a round of purchases by the world’s fourth largest oil consumer, to build up emergency stockpiles.
Splash had reported on March 20 that the Indian government was to rope in private refiners and state firms from West Asia to build five new mega crude oil reserves worth INR200bn ($3.2bn), and that it was also planning tax incentives to attract foreign firms to build and use the assets.
Sources told Reuters in London that the crude would load in May for shipping to the first phase of India’s SPR, on the country’s east coast.
In addition, government-run refiners Indian Oil Corporation (IOC) and Hindustan Petroleum Corporation (HPCL) are to buy 8m barrels of crude that will load on another three very large crude carriers for the SPR storage site at Visakhapatnam port, on the east coast.
Two more SPR sites, at Mangalore and Padur, on the country’s west coast, are expected to be ready by October this year, and will allow storage of 29.3m barrels. It is widely expected that India’s purchases of crude will go up sharply at the time.