In a recent development, Minister of Petroleum, Dharmendra Pradhan said in a TV interview that India is mulling over the possibilities of storing cheap oil in the United States of America. Since the global consumption of petroleum products has dropped in the recent time, leading to a significant oil price fall, the government of India is looking to take advantage of it. With India’s 5.33 million tonnes of strategic oil storage full, it is considering storage options in other countries, most notably in the USA.
What the petroleum minister told CNBC TV18 is: “We are exploring some possibilities if we can store some of our investment in a different country. We are exploring the possibility in the USA if we can store some of the low-priced oil.”
Taking the oil price drop advantage
A few months back, when the Sudi Arabia and Russia were fighting over oil, the price went all time low. Countries all across the world were looking to take advantage of it. In fact, some including Japan, South Korea, China, and India stored up to their full capacity. Since India’s storage capacity is much less than other major countries, the only viable option it has is to store elsewhere.
India will not be the first country to store cheap oil in the US. Australia, recently had a deal with the Americans about the same.
Saving India’s millions
In the beginning of the Oil price drop phase, many commentators and economists predicted that India can save millions of dollars by storing cheap oil. Unfortunately, the poor storage capacity of the country didn’t help the cause. Although the government has given huge emphasis on enhancing its strategic storage capacity, what it needs to do currently is what it is doing. Even if we include the storing charge by the US, India can save a huge amount of money in the months to come.