The Telegraph
Since 1st March, 1999
Email This PagePrint This Page
Top-up alert to oil companies

New Delhi, Oct. 1: The government has asked Indian Oil Corporation (IOC) and other state-run oil marketers to stockpile an extra 15 days’ oil reserve on top of the 45-day buffer of petro-products and 30-day stock of crude, already amassed in view of the increased threat of a US-led war against Iraq.

“We have submitted a report on building strategic crude oil reserves equivalent to 15 days’ demand to the government,” chairman M. S. Ramachandran told reporters here today. “We have already stockpiled petro-products, and are currently topping off our crude reserves with shipments due this month,” he added.

The government advises its oil companies before any major war or security threat in the region to stockpile for eventualities. One of the reasons forwarded by petroleum minister Ram Naik to the Cabinet for thwarting a move to sell off two state-run oil marketers was that during the 1971 face-off with Pakistan, a multinational oil corporation had refused to play ball and stockpile ahead of the battle.

Sources said Indian Oil had, at the same time, decided to go in for import of up to 3 million tonnes of crude from Iraq annually. However, this could not be confirmed.

“We source crude from 40-odd suppliers. We have been broad-basing our supply line and in eventuality of any supply line being choked we have sufficient fall back options,” the IOC chief said. India imports roughly 70 per cent of its over 100 million tonne crude demand.

It has been diversifying its sources of supply not to be caught in a bind in case tanker shipping through the Gulf region is disturbed during another anti-Iraq strike. IOC has, among other places, started sourcing crude from south-east Asian sources, which can be landed at Haldia or Vizag.

IOC and other state-run oil companies have also started buying in the futures market in anticipation of a price spike. The futures involve physical hedging and are linked to product prices.

Email This PagePrint This Page