New Delhi: In a bid to provide relief to citizens from the rising fuel prices, India will release 5 million barrels of crude oil from its strategic petroleum reserves as a part of a coordinated move with other major global energy consumers such as the USA, China, Japan and South Korea.
The Minister of State (MoS) for Petroleum and Natural Gas said this in the Rajya Sabha on Monday.
The minister in his speech said that domestic price of crude linked to international benchmarks of crude prices. These get affected by many factors, including the supply and demand, futures’ trading, impact of Covid-19 and other geopolitical situation. Linear co-relation such as pricing and any one of these factors in isolation indeterminable.
The government consistently reviewing high petroleum and diesel prices domestically. The Centre had reduced ‘central excise duty' on petrol and diesel by Rs 5 per litre and Rs 10 per litre, respectively, on November 3. It was followed by reduction in VAT on fuel by several state governments, said MoS Petroleum and Natural Gas.
The move is being seen as a strategic step to rein in spiralling global crude oil prices and to keep them under check. In response, the OPEC+ group of oil exporting countries, which accounts for about 50 per cent of global crude supply, has indicated that it may reconsider plans to restore production over the coming months.
A release of 5 million barrels of crude oil would equate to about 12. 8 per cent of India’s strategic oil reserves of 5.33 million tonnes of crude oil, which is estimated to be equivalent to 9.5 days of its crude oil requirement.