Govt plans to lease strategic oil reserve space to private companies

The government plans to lease out a fifth of its Strategic Petroleum Reserve capacity to oil companies after the budget scrapped a ₹5,000-crore plan to purchase crude to fill it, an official said. India has strategic crude storage at three places - Mangalore and Padur in Karnataka and Visakhapatnam in Andhra Pradesh - with a total capacity of 5 million metric tonnes (mmt). Rules allow part of these storages to be leased out to oil companies while giving the government the right to access crude from these reserves in case of emergency.

About 0.75 mmt of capacity in Mangalore and about 0.25 mmt in Visakhapatnam is currently vacant and needs to be filled, L R Jain, the CEO of Indian Strategic Petroleum Reserves Limited (ISPRL), said on Tuesday.

ISPRL, which manages the country's SPR, will soon invite separate expressions of interest (EoIs) from energy players seeking to commercially use the unfilled storage space, Jain said.