The Centre plans to import about 5.5 million barrels of crude oil after October to fill part of its Mangalore strategic petroleum reserve (SPR) in southern Karnataka state and may change the crude grade at another facility, a source familiar with the plan said on Thursday.
The oil imports are needed because one of the Mangalore reserve tanks is currently empty.
India, the world's third-biggest oil importer and consumer, has built strategic storage at three locations - Mangalore, Padur and Vizag - in southern India to store up to 5 million tonnes of crude (37 million barrels) that could be tapped on in case of supply disruption.
Indian Strategic Petroleum Reserves Ltd (ISPRL), the government-owned company mandated to manage the SPRs, has been selling from the caverns to local refiners after a change in the government rules in 2021.
The Mangalore SPR facility has two equal size compartments of about 5.5 million barrels each. One of those that had previously contained Saudi oil is empty, the source said.
This compartment would be filled after the single point mooring (SPM) facility at the Mangalore port resumes operations in October, the source said.
The SPM, used by very large crude carriers for discharging oil, is typically shut during the monsoon season.
The second compartment at the Mangalore SPR has been leased to UAE's Abu Dhabi National Oil Co.
The Indian government has allocated 50 billion rupees($611.40 million) for its strategic oil purchases this fiscal year to March 31, 2024. Overall, India will need to import about 13 million barrels of oil for the SPR as later this year another SPR would be empty, the source said.
India had released oil from its strategic reserves as part of the U.S.-coordinated programme to calm global oil prices in 2021.
ISPRL plans to sell a second batch of 300,000 tonnes of Iraqi Basra crude from the 1.03 million tonne Vizag SPR in southern Andhra Pradesh state, according to its website.
The company plans to sell the remaining oil by end-2023 or early 2024 and refill it with possibly another crude grade, the source said.
"ISPRL might fill Vizag SPR with a new grade depending on pricing," the source said.
ISPRL did not respond to a request seeking comment.