New Delhi, Oct 30: India will build strategic storage to stockpile crude oil reserves to ward off threat of supply disruptions in emergencies such as war, Petroleum Minister Ram Naik said today. "We are discussing building storage facilities to stock 15 million tonnes of crude oil to meet contingency requirements," he said at a CII conference on energy security of India here.
The 15 million tonnes stockpile would be sufficient to meet 45 days requirement of the country, that is 70 per cent import dependant to meet its crude oil requirement.
"We spent Rs 84,000 crore last year to import crude. The general political instability in the middle east region, which contributes 67 per cent of India's crude oil, is a cause of anxiety from the oil supply security perspective," he said.
He said cost estimates of building and maintaining such reserves will be worked out separately.
"There are two options to build strategic reserves. First being that government gives grants for initial capital investment and annul cost is recovered through OIDB (Oil Industry Development Board) cess. The other option is to levy a special cess on petrol and diesel that would go for creation of storage capacity as well as inventory cost," he said.
Consultants would be appointed to study the various options, he said.
Strategic reserves are being planned on lines of the ones maintained by US, Germany and Japan.
Bureau Report