Feb. 10 (Bloomberg) -- India will complete building its first crude oil storage terminal by the middle of next year as it seeks to insulate the country against price fluctuations and ensure fuel supplies.
The tank at Visakhapatnam on the east coast will have a capacity of 1.33 million metric tons, Oil Secretary S. Sundareshan said in an interview at his office in New Delhi. The nation’s storage capacity will rise to 5 million tons when two more terminals are built at Mangalore on the west coast by 2012, he said yesterday. That’s equal to two weeks of current imports.
India, which imports 77 percent of its oil needs, is emulating programs in the U.S., Japan and China to build an emergency stockpile. Crude declined from a record $147.27 a barrel in July 2008 as demand fell following the worst global recession since the World War II. Prices have gained 86 percent in the past year as economies recover.
“Given the volatility in crude prices, the storage terminals are intended as a buffer for the economy,” said Dharmakirti Joshi, an economist at Mumbai-based Crisil Ltd., the local unit of Standard & Poor’s. “This should ideally have been done when oil prices were at their lows.”