The Union government has decided to release 5 million barrels of crude oil from its strategic petroleum reserves in a bid to reduce fuel prices, the Ministry of Petroleum and Natural Gas said on Tuesday.
“This release will happen in parallel and in consultation with other major global energy consumers including the USA, People’s Republic of China, Japan and the Republic of Korea [South Korea],” the ministry said in a press release.
The stocks will be sold to Mangalore Refinery and Petrochemicals Limited and Hindustan Petroleum Corporation Limited, PTI quoted a top government official as saying.
“India strongly believes that the pricing of liquid hydrocarbons should be reasonable, responsible and be determined by market forces,” the petroleum ministry said. “India has repeatedly expressed concern at supply of oil being artificially adjusted below demand levels by oil producing countries, leading to rising prices and negative attendant consequences.”
United States President Joe Biden also announced on Tuesday that the country’s Department of Energy will release 50 million barrels of oil from its strategic petroleum reserves to address the mismatch between demand and supply.
“This culminates weeks of consultations with countries around the world, and we are already seeing the effect of this work on oil prices,” the White House noted in a statement. “Over the last several weeks as reports of this work became public, oil prices are down nearly 10 percent.”
Biden has repeatedly urged the Organization of the Petroleum Exporting Countries, or OPEC+, to pump more oil. The grouping, however, had rejected requests to do so, according to Reuters.
The grouping is slated to meet on December 2 to hold discussions on the topic.
Fuel prices in India
Before the announcement, fuel prices had risen to record high levels across the country.
Since the reduction in excise duty, the prices of petrol and diesel in the country have remained unchanged for the past 19 days, according to the Financial Express. Among major cities, Mumbai currently has the highest prices of petrol and diesel, at Rs 109.98 per litre and Rs 94.14 per litre, respectively.