NEW DELHI: The Centre has promised to release five million (50 lakh) barrels of crude oil from its Strategic Petroleum Reserves, which might lead to the further decline in gasoline and diesel pricing in the days ahead.
The announcement was made after Hardeep Singh Puri, India's Minister of Petroleum and Natural Gas, met with top ministry officials and executives from oil marketing corporations in Delhi on Tuesday.
Five million barrels of crude oil will be released simultaneously and in conjunction with other key global energy consumers, such as the United States, China, Japan, and South Korea.
The judgment was likely made after the US contacted India and other big oil customers to ask them to surrender their strategic petroleum reserves in order to keep crude oil prices from rising. According to India's Petroleum Ministry, the pricing of liquid hydrocarbons ought to be "fair, fair, and regulated by market forces." "India has frequently raised worry about oil producing nations intentionally adjusting supply below demand levels, resulting in higher prices and severe effects," the ministry noted.
According to news sources, India's good reaction to the planned international move might result in more gasoline price reductions.
On November 3, the Centre lowered petrol and diesel prices by Rs 5 and Rs 10, respectively. Nevertheless, if the main oil producing countries do not reconsider their growing crude oil prices, the drop may not last long, according to reports.
The government creates Strategic Petroleum Reserves to deal with emergency scenarios.
The United States requested the release of strategic reserves after the Organisation of Petroleum Exporting Countries (Opec)-plus grouping overlooked repeated requests from the United States and India to expand production to lower prices, which were at an all-time high and wreaking havoc on economies recovering from the coronavirus disease outbreak.
The United States' attempts to pull together the world's major oil consumers paid off in recent days, as crude prices fell below their seven-year highs of $80 per barrel last week. The United States, China, India, Japan, and South Korea are the world's top crude oil consumers.
India has been working to create an extra 6.5 MMT of strategic petroleum reserves as a precaution, while countries of the International Energy Agency (IEA) preserve emergency oil stockpiles equal to at least 90 days of net imports as a matter of course.