India announced on Tuesday that it will release 5 million barrels of crude oil from its strategic reserves. Major economies like China, US, Japan to do the same to cool down international oil price. India stores nearly 38 million barrels of crude oil in underground caverns. This will be the first ever that India releases its crude oil stock to contain inflationary price of oil.
“India has agreed to release 5mn barrels of crude oil from its Strategic Petroleum Reserve. This release will happen in parallel and in consultation with other major global economies like USA, People’s Republic of China, Japan, and the Republic of Korea,” a statement released by the government said.
This decision by some of the world’s largest oil-consuming nations, including India, comes after USA’s request. The US requested certain countries to release crude stockpiles in a coordinated effort to lower global energy price. USA itself plans to release 50 million barrels of oil from its strategic reserves. Japan and China have also shown their willingness to release crude oil from their strategic reserves.
Coming back to India- its stock once released, will be sold to refineries of Mangalore Refinery and Petrochemicals Ltd. and Hindustan Petroleum Corp Ltd, which are connected by pipelines to the strategic reserves. Previously, the Central government announced reduction in excise duty on petrol and diesel by ₹5 and ₹10 per litre. Moreover, some states announced additional cuts to provide relief to their citizens.
This combined effort by major economies of the world might just do the trick and put a dent in the ever-rising crude oil prices.
Image Credits – Wikimedia Commons
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