India took advantage of oil price drop and purchased 32 million tons
While oil consumption fell sharply amid pandemic, India rushed to take advantage of prices that the market has not seen for years and bought "black gold" for storage. The country is the third largest importer in the market, and about 85% of its demand is covered by external supplies.
The country's Minister of Oil and Natural Gas, Dharmendra Pradhan, said that India had bought a total of 32 million tons (about 234 million barrels) of cheap oil, which had filled not only the strategic reserves but also other storage facilities. Deliveries from Saudi Arabia, UAE and Iraq filled underground storage capacity with 5.33 million tonnes, while 25 million tonnes were placed in surface tanks, pipelines and oil product tanks, with a further 7 million tonnes stored in tankers. The purchased oil belongs to India, but it was bought by the state oil companies - Indian Oil, Bhrarat Petroleum, Hindustan Petroleum and Mangalore Refinary and Petrochemicals,and the state promised to reimburse the funds later.
The amount purchased should be enough to cover 57 days of oil demand, although this estimate is based on a demand data before the world was engulfed by the coronavirus pandemic and India imposed a quarantine, which the government decided to extend until May 17. In addition, it is worth considering that India's refineries also have oil reserves that are sufficient to cover the demand for 65 days.
Currently, India has three underground oil storage facilities from its strategic reserve - Padur, with a capacity of 2.5 million tons, Mangalor for 1.5 million tons and Visahapatnam for 1.33 million tons. In June 2018, the government approved the construction of a new storage facility in Chandihola with a capacity of 4.5 million tons and the expansion of Padur's capacity by another 2.5 million tons.