NEW DELHI, Feb 1 - The Indian government has announced a budget allocation of 55.97 billion rupees ($646.78 million) to support the purchase of oil for the country's strategic petroleum reserves (SPRs). The budget document indicates that the Indian Strategic Petroleum Reserve Ltd (ISPRL), which oversees federal oil inventories, operates three SPRs in southern India with a total capacity of approximately 5 million tons.
Part of this capacity is utilized for commercial operations by firms including Abu Dhabi National Oil Co (ADNOC). The budget also includes around 1.8 billion rupees for the operation and maintenance of the SPRs and 3.35 billion rupees for land acquisition and the construction of new storage caverns.
As the world's third-largest oil importer, India relies on imports for over 80% of its oil needs and is expanding its SPR capacity to safeguard against potential global supply disruptions. ISPRL has expressed interest in collaborating with private companies to establish a 2.5 million metric ton petroleum reserve storage facility at Padur in Karnataka. Additionally, plans are underway to construct a 4 million ton SPR at Chandikhol in Odisha.
In related financial news, the Indian government anticipates a 9% increase in income from the central bank and public financial institutions in the upcoming fiscal year, which is expected to help mitigate a decline in tax revenues. Transfers from the Reserve Bank of India and state-owned banks are projected to rise to 2.56 trillion rupees ($29.6 billion) starting in April.
Furthermore, the Indian government expects an over 40% increase in tax collections from securities trading. The Finance Minister's budget estimates that revenues from the securities transaction tax (STT) will surpass $9 billion next year, fueled by a booming equity market and rising trading volumes.