23 Mar 2024
The Ministry of Commerce and Industry issued an order on Saturday permitting Abu Dhabi National Oil Company (Adnoc) to export the crude oil stored in underground strategic reserves in Mangalore. This decision aims to provide operational flexibility to the foreign firm. Currently, the export of crude oil, essential for fuel production such as petrol and diesel, is restricted to the state-owned Indian Oil Corporation (IOC).
The Ministry of Commerce and Industry issued an order on Saturday permitting Abu Dhabi National Oil Company (Adnoc) to export the crude oil stored in underground strategic reserves in Mangalore. This decision aims to provide operational flexibility to the foreign firm. Currently, the export of crude oil, essential for fuel production such as petrol and diesel, is restricted to the state-owned Indian Oil Corporation (IOC).
As per the ministry's directive, while the condition of permitting exports solely through IOC remains unchanged, "AMI (Adnoc Marketing International (India) RSC Limited India)" is granted an exemption from the STE conditions. They are permitted to re-export crude oil from their commercial stockpile at the Mangalore strategic petroleum reserve, bearing the expenses themselves.
As the world's third-largest oil importer and consumer, India relies on imports for over 85% of its oil requirements. To mitigate potential supply disruptions, the country has established strategic storage facilities at three locations, capable of storing up to 5.33 million tonnes of oil.
These storage sites, located in Visakhapatnam (1.33 million tonnes) in Andhra Pradesh, Mangalore (1.5 million tonnes), and Padur (2.5 million tonnes) in Karnataka, collectively provide reserves equivalent to about 9 days of national demand.
The Indian Strategic Petroleum Reserve Ltd has leased half of the 1.5 million tonne capacity at the Mangalore storage facility to Adnoc, while retaining the remaining portion for itself.
The rationale behind leasing storage space to foreign entities was to enable them to store oil for potential sale to domestic refineries. However, in the event of an emergency, India retains priority access to the stored oil.
Adnoc had requested authorization to export its oil from the cavern in situations where it faced challenges in finding buyers among Indian refiners. Following the notification, Adnoc is now permitted to export oil stored in the Mangalore facility.
The detailed article published by www.business-standard.com can be accessed from https://www.business-standard.com/economy/news/govt-allows-uae-s-adnoc-to-export-oil-from-indian-strategic-storage-124032300504_1.html
Image courtesy: www.business-standard.com
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