For the first time in India, 3 million barrels of crude oil will be dumped from the reserves

New Delhi, Dt
Petrol and diesel prices have been at record highs in the country for some time now, which has led to a sharp rise in inflation. Leading countries, including India, China, and Japan, will pour crude oil from their strategic reserves to lower international crude oil prices at the suggestion of the US at a time when most of the world is worried about the high price of crude oil. As part of this process, the central government has for the first time decided to release 3 million barrels of crude from its reserves. The government's move is likely to lead to further reduction in petrol and diesel prices in the near future.
With the Assembly elections scheduled to be held in five states, including Uttar Pradesh and Punjab, early next year, high petrol-diesel prices could pose a problem for the government. In such circumstances, before Diwali, the Modi government spent Rs. 2 and Rs. Reduced 10 to give relief to common people. Now, the central government has decided to bring crude oil from the reserves to the market to give more relief to the people, government sources said.
India has strategically stored underground storage facilities at three locations in Andhra Pradesh's Visakhapatnam and Karnataka on its east and west coasts, where it can store 25 million barrels of crude oil or 2.5 million tonnes. The government will release 3 million barrels of crude oil from this quantity, government sources said on condition of anonymity.
Sources added that no decision has been taken yet on when the amount will be released, but it is likely to be released in the next 8 to 10 days. The decision to release crude from the reserves will be taken after discussions with countries including the US. The United States is likely to release an estimated 50 million barrels of crude oil from its strategic volume in exchange for India's release of 3 million barrels of crude oil. Out of the reserves, 3 million barrels of crude oil will be given to Mangalore Refinery and Bharat Petroleum. However, there is disagreement among experts about the reduction in petrol-diesel prices due to this quantity coming into the market. According to a study, the average daily consumption of crude oil in India is 3 lakh barrels. The 5 million barrels released against it can only protect one or two days at most, so it would be an exaggeration to expect that it will directly benefit consumers.
Meanwhile, world crude oil prices have more than doubled since last year. Brent crude hit a record high of ૪ 2.50 a barrel on October 9, falling to ૭૮ 5 a barrel this week. Brent crude is currently trading at ૨૪ 4.5 a barrel. Inflation in the US is at a three-decade high and in Japan it is at a 20-year high. In this situation, the US, Japan, India and some other nations have decided to release crude oil from their reserves. While the world's leading countries will release crude oil from their reserves, OPEC countries are also planning to increase crude oil production.
Amid rising international crude oil prices, OPEC nations are negotiating to release a variety of US-led crude oil to the market as production growth slows against world demand. It is possible that US President Joe Biden will announce the decision in a day or so.