New Delhi: Strategic Petroleum Reserve (SPR) capacity expansion is under active consideration amid the supply disruptions unleashed by the West Asia crisis, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, said on Thursday at an inter-ministerial press briefing.
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India currently has 5.33 million metric tonnes (MMT) of underground SPR capacity across Visakhapatnam, Mangaluru and Padur. While the government had earlier approved two additional commercial-cum-strategic storage facilities of 6.5 MMT at Chandikhol and Padur in principle, they are yet to be developed on the ground.
Asked whether the government was considering financial support for public sector oil marketing companies that have been incurring under-recoveries on all forms of fuels, Sharma said, “There are under-recoveries on ATF and petrol and diesel. But I want to tell you that the highest priority for the government of India at this moment of time is to ensure supplies to the consumer in the country.”
The comment comes as oil PSUs continue to absorb losses on petrol, diesel and LPG. ATF, which was the only fuel where oil PSUs faced no under-recoveries until March 31, has now turned loss-making with the latest ATF price increase which passes on a partial increase to consumers despite a steep rise in global jet fuel prices. Even though the decision has been taken to shield the common public from the price shock facing the global energy market, the financial brunt is being borne by oil PSUs like Indian Oil, HPCL and BPCL.
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The remarks come against the backdrop of sharp volatility in fuel markets after the West Asia crisis lifted international ATF prices and forced India to limit the pass-through to domestic airlines. Domestic ATF prices were raised by 8.6 percent, even as the ministry said a full pass-through would have pushed prices up by more than 100 percent, if fully reflected.
