India has filled all its available crude storage capacity, including commercial and strategic petroleum reserve (SPR) facilities, and is holding around 50mn bl in floating storage, oil minister Dharmendra Pradhan said.
Stocks have risen to around 37mn t or 270mn bl, after Indian refining runs fell by about 50pc because of the Covid-19 outbreak and low crude prices prompted state-controlled refiners to divert term supplies from the Middle East to storage.
Stocks comprise 25mn t in land-based storage facilities — including tanks, pipelines and refinery stocks — 5mn t in SPRs and 7mn t in floating storage, Pradhan said. India paid low rates for crude that went into some of the storage facilities, including 2mn t sent to SPRs and the 7mn t of floating storage, he said, without giving details.
The Padur SPR facility has been filled at "very low crude prices," SPR operator Indian Strategic Petroleum said today.
Around 2mn t or 15mn bl was bought for the strategic reserves in April and May, Pradhan said. He did not give any indication of how much other stocks have increased in recent months, but the reference to the low prices paid for the 50mn bl of floating stocks suggests these have been built up since crude prices slumped in early March.
The amount of crude held in floating storage has increased after India ran out of tank space on land and Middle East suppliers led by Iraq and Saudi Arabia refused to accept force majeure declarations by Indian refiners.
The government has now stored around 20pc of its needs, Pradhan said, without giving details.
India's transport fuel demand declined by nearly 60pc in April from a year earlier because of a nationwide lockdown to combat the coronavirus pandemic. Indian refining runs were 5mn b/d in March, down from 5.34mn b/d a month earlier, according to the latest official data.
India's SPR facilities have been filled ahead of schedule. The facilities were previously expected to be filled by the end of May. India's 39mn bl of SPR capacity comprises 9.7mn bl at Vishakhapatnam (Vizag), 11mn bl at Mangalore and 18.3mn bl at Padur, all of which are underground rock caverns.
The Indian government has extended a nationwide lockdown until 17 May in an attempt to curb the spread of the Covid-19 outbreak. The restrictions, which were initially imposed on 25 March, were due to end yesterday.
