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Archana Chaudhary

MUMBAI, March 19

THE country will not face any shortage of petroleum products for at least two months, in case international crude and product supplies are affected by US attacks on Iraq.

According to refiners, public and private sector oil companies have stocked up product reserves of up to 40-45 days and crude oil supplies to last a minimum 12 days. "Indian refineries will be able to function normally for up to one month and will be able to sustain with certain restrictions for another month," a senior Bharat Petroleum Corporation Ltd official said.

According to officials, the country's largest oil company - Indian Oil - has already been stocking up inventories, in preparation for the eventuality of a Gulf war, at its Vadinar installation. Likewise, BPCL and Hindustan Petroleum have also been maintaining inventories.

"Virtually everyone has built up inventories ever since war fears began," the official said. While diesel stocks can last up to 37-40 days, petrol stocks will last 30 days.

According to industry sources, all LPG stocks will last 19 days while aviation turbine fuel will last 88 days. PDS kerosene stocks may last for 51 days.

Oil companies have been facing shortage of storage capacities. Although the Union Government's plan to maintain "strategic reserves" is under implementation, industry officials say it will take around 3-4 years before storage capacities are built. The plan is estimated to cost around Rs 4,000 crore, officials said.

"The Government is yet to finalise the holding cost to be paid to companies once the reserves' plan is in place," said a senior oil analyst.

According to sources, companies are also said to be stocking up products as well as crude in oil tankers lined up along the coast.

"Besides, we also value the 30 per cent crude supplies from the Oil and Natural Gas Corporation and Oil India, which can be relied on in case imports are affected," a BPCL official said.

Of its requirement of 105 million tonnes of crude, India imports 70 per cent. Last year, the country spent $16 billion on importing 78 million tonnes of crude.

Every $1 increase in crude prices internationally will increase India's crude import bill by $1.7 million every day.

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