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Why Modi govt not constructing deliberate strategic oil reserves, asks Moily

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Former petroleum minister M Veerappa Moily (File picture) NEW DELHI: Gross legal neglect of not constructing deliberate strategic oil reserves led to India shedding its biggest alternative to construct strategic stockpile utilizing multi-year low international oil costs, former petroleum minister […]

Former petroleum minister M Veerappa Moily (File picture)

NEW DELHI: Gross legal neglect of not constructing deliberate strategic oil reserves led to India shedding its biggest alternative to construct strategic stockpile utilizing multi-year low international oil costs, former petroleum minister M Veerappa Moily alleged on Saturday whereas questioning the transfer to rent a US facility for the aim.
In an announcement, Moily mentioned 5.33 million tonnes of strategic oil storages have been constructed by the Congress-led UPA-I and II at Visakhapatnam in Andhra Pradesh, Mangalore and Padur (each in Karnataka) to assist virtually 10 days of India’s oil wants throughout an emergency.
Plans for one more 12.5 million tonnes of strategic storage in 4 states was initiated by the UPA-II in 2013 however these have been placed on again burner by the BJP-led NDA authorities, he alleged.
Had these reserves being constructed previously six years, India may have saved oil in them by shopping for it when worldwide charges plunged to two-decade low in April. As a substitute the federal government is now trying to rent US strategic storages to reinforce India’s emergency stockpile.
“The mentioned partnership to retailer crude oil within the Strategic Petroleum Reserve of the US isn’t diplomatically and strategically advisable as reported from the settlement drawn between India and the US below the Strategic Power Partnership (SEP) ministerial meet, co-chaired by petroleum minister Dharmendra Pradhan and US Power Secretary Dan Brouillette.
“It’s in the very best curiosity of oil safety of the nation that we pursue constructing further capability as was proposed by UPA-2,” he mentioned.
As a substitute of paying the US, it was higher to construct storage in their very own nation. In addition to, accessing oil saved in US services can be troublesome if sea routes have been blocked.
Strategic storages are constructed as insurance coverage in opposition to provide disruptions.
“Even after six years there was a gross legal neglect on the a part of the current authorities both to place up new refineries or arrange extra strategic storage services within the public sector and even within the non-public sector.
“The NDA authorities has misplaced the best alternative of storing strategic reserves which is now accessible on the lowest worldwide costs. The laxity on the a part of the NDA to protect the integrity of oil reserves is a nationwide tragedy,” he mentioned.
Moily mentioned the UPA had invested USD 600 million in constructing strategic storage capability at Visakhapatnam (1.33 MMT), Mangaluru (1.5 MMT) and Padur (2.5 MMT).
“Considering the oil safety issues of India, the UPA-II in 2013 had determined to reinforce the strategic crude oil storage within the nation and deliberate for an extra crude oil storage facility and entrusted Indian Strategic Petroleum Reserves Ltd (ISPRL) with the accountability of preparation of Detailed Feasibility Studies (DFRs) for 12.5 million tonnes of strategic storage of crude oil in Part-II in 4 States,” he mentioned.
The places chosen have been Bikaner in Rajasthan, Chandikhol in Odisha, Rajkot in Gujarat and Padur-II in Karnataka. The DFRs had been ready by Engineers India Ltd (EIL) with capacities proposed as Chandikhol 3.75 MMT, Rajkot 2.5 MMT, Bikaner 3.75 MMT and Padur 2.5 MMT.
However these have been by no means pursued by the BJP-led NDA authorities within the final six years.
“It now seems that the NDA authorities has simply woken as much as the truth and deliberate to take ahead the UPA for an extra 6.5 million tonnes storage at Chandikhol (four MMT) in Odisha and Padur (2.5 MMT) in Karnataka,” he mentioned.
The deliberate second part with an funding of $1.6 billion will add one other 12 days of crude storage as soon as operational and can take the full storage capability to 87 days after including the 65 days of storage capability with the nation’s refiners.
“The DFRs ready by Engineers India Ltd (EIL) had been put to chilly storage by the current regime,” he alleged.
India’s present refining capability stands at 249 million tonnes each year, comprising of its 23 refineries – 18 below public sector, three below non-public sector and two in joint ventures.
Indian Oil Company (IOC) is the biggest home refiner with a capability of 80.7 MMTPA. Prime three corporations – IOC, Bharat Petroleum Company (BPCL) and Reliance Industries (RIL) – contribute round 66.7 per cent of India’s complete refining manufacturing in FY 2018-19.
“The UPA I and UPA II had additionally taken efficient steps to double the refining capability of Paradip refinery and likewise to extend the refining capability at Mangalore, Cochin refinery and different refineries within the nation,” he mentioned.
A Rs 42,000 crore Barmer refinery-cum-petrochemical advanced in Rajasthan was initiated in 2013 to make the most of the crude availability within the area and to generate employment alternatives to the locals, he mentioned.
“The venture was abolished by the NDA authorities. It’s only just lately that they’ve deliberate to revive the venture. The NDA authorities neither took ahead the UPA agenda nor did they introduce any new capability within the refinery,” he added.

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