Govt plans to increase crude reserves to 45 days

timesofindia.indiatimes.com REUTERS[ MONDAY, FEBRUARY 03, 2003 08:30:21 PM ]

NEW DELHI: Union Petroleum Minister Ram Naik said on Monday the government planned to boost the country's strategic crude oil reserves to 45 days from 15 at an estimated cost of 43.50 billion rupees.   The statement came amid the looming threat of a U.S.-led war against Iraq, which the United States accuses of thwarting U.N. inspectors' efforts to strip Iraq of its alleged weapons of mass destruction.   "We have been asked to conduct a study by a professional agency to finalise the creation of the strategic reserves," Naik told reporters after a meeting with Prime Minister Atal Behari Vajpayee.   "We would like to have 45 days of strategic reserves," he said. "Right now, it is just 15 days and Japan has 120 days."   India has 17 refineries that can process 2.3 million bpd and imports 70 percent of its crude oil needs.   Petroleum ministry officials say India is better prepared today than it was during the Gulf War in 1991 as the country was then a big importer of diesel, which accounts for 40 percent of local demand. Now, India exports oil products and has more storage capacity.   Naik said the country was making arrangements for supplies from some other nations apart from its traditional Middle East suppliers in "case of any conflict between Iraq and the U.S". Naik did not give details.   He said the government could either impose a tax on petroleum products or give grants to oil companies to cover the cost of increasing the reserves.   Naik said the cost of maintaining the oil reserves was estimated to be about 14 billion rupees.   The prime minister has asked the petroleum ministry to accelerate the process of acquiring oil equity abroad to boost crude resources abroad, he said.   "From one country we now have oil equity in nine countries and four more are in the pipeline. The four newcountries are Venezuela, Qatar, Kazakhstan and Indonesia," Naik said.