Assuring that the government is actively reviewing the conflict scenario in West Asia, top government officials said on Tuesday that India has crude oil stocks for 25 days and an equal volume of refined petroleum products stocks, which is sufficient to address supply disruptions for 50 days.
India consumes around 5.6 million barrels of petroleum products, with around 67 million consumers visiting retail outlets every day. Around 2.6-2.7 mb/d of supplies pass through the Strait of Hormuz.
Hormuz route risk
Generally, 40 per cent of India’s crude oil imports pass through the Strait of Hormuz. However, in recent years, as domestic refiners increased their procurement from West Asian buyers such as Iraq, Saudi Arabia and the UAE, volumes passing through the world’s most strategic energy choke point have increased to around 50 per cent.
Round-the-clock monitoring
The Petroleum Ministry said a 24/7 control room has been set up to continuously monitor the West Asian situation, with input from refiners, shippers, and other stakeholders. There are expectations that the situation in West Asia may “cool somewhat” in the next two weeks.
“We have overall around 50 days of stock for oil, which is sufficient. Besides, there is crude in the strategic petroleum reserves (SPRs), which is additional. We can also source from other regions such as the US, South America and West Africa, which is also happening as we speak. Refiners are out sourcing replacements as and when needed. Government is ensuring availability and affordability of energy supplies. This has also been the case in the last 11 years,” said one of the officials.
Responding to a starred question in the Rajya Sabha on February 9, Oil Minister H S Puri had said India has around 4.094 million tonnes (mt) of crude stock in SPRs, which is around 77 per cent of the total capacity of 5.33 mt. At full capacity, SPRs will last for 9.5 days.
No price hike
Government sources said that there are no immediate plans to raise the retail prices of petrol and diesel. They also said that the general understanding is that if the conflict extends beyond 10-15 days, crude oil prices may surpass $82 per barrel.
Puri also briefed the media on the West Asian crisis and India’s preparations. The Minister assured that India is “well stocked with crude oil and inventories of key petroleum products including petrol, diesel and ATF” to deal with short-term disruptions arising from the Middle East.
“Indian energy companies now have access to energy supplies that are not routed through the Strait of Hormuz. Such cargoes will remain available and help mitigate supplies that may be temporarily affected enroute through the Strait of Hormuz,” the Ministry of Petroleum and Natural Gas (MoPNG) said in a statement.
Consumers first policy
Safeguarding the interests of Indian consumers remains the highest priority. Based on continuous monitoring, the government is cautiously optimistic that phased measures can be taken, if required, to further mitigate the situation, the Ministry said.