Creation of Strategic Petroleum Product Reserve – 20 percent Ethanol Blended
India has a Strategic Reserve for Crude Oil.
There is a need for having a Strategic Petroleum Product Reserve at Points and Proximity of Consumption in the Indian Union.
An aggressive stance on blending ethanol with petroleum products can give rise to the new series of tactical investment, physical and working capital. Citizen’s participation will also be called for as it is in the interest of the consumer and the economy that vital fuels are always accessible.
This demands a policy that these reserves are part of the locales, so that at any given time, the Products Reserve is sufficient to meet the requirements for 30 days and beyond.
The possible locations can be:
a) Strategic Locations at Junctions of Indian Railways and NHAI
b) Rural Stations at a distance of 25 kms to 50 kms from cities and towns
c) Proximity to producers – within 25 kms to 50 kms
d) Suitable for Blending, Stock and Flow with Ethanol 20 percent.
e) Blending with refined products needs to be separated from refineries with tanks, approved blending technology and ready delivery for routine sales as well as defined national or international calamities.
f) The total ” floating ” stock of blended products can be mandated to be available to all Marketing Companies.
g) Marketing companies need to be offered pooled facilities at nominal national cost, where all Departments – Central and State Government Activities converge.
h) National Interest defined and mandatory connectivity to National Users
· Normal Conditions
· Disruptions in commercial activities –
§ notified and sudden refinery or logistics related mishaps
§ localised calamities
§ national calamity related stoppages and shutdowns as determined by Authority
Nodal National Agency
For Example:
o Projects and Equipments Corporation Limited – Can be the National Agency and can be an Equity Partner with all other agencies as a Catalyst up to 26 percent of Equity.
o All Petroleum Marketing Companies with written agreements on supply and demand matching at respective locations.
NHAI
– Needs to float a Subsidiary with commercial viability offering Right of Way and annexed facilities for tanks and pipelines and extended support to Highway Transport.
Indian Railways
# Needs to nominate an existing subsidiary like RITES or IRCTC or both that can use railway infrastructure in rural areas.
# These facilities with strategic and tactical inputs also meet
# Defence
# State Government nominated uses.
International agencies and Government subsidiaries with interest in Petroleum sector can be invited based on their interest in the Indian markets if,
– they have expressed interest, as India is a dominant importer,
– they also have sovereign funds.
– Example – Norway, Abu Dhabi, who can provide,
Capital
International Specialisation
Innovation
Systems
Stakeholders
Protecting their interests
Safety of Capital
Return on Investment
Strategic interest
Commercial Interests in finding neutral markets
Green Funds
Agriculture and Employment Generating Agencies can be participating
Example:
Milk Unions
Poultry organisations
State Road Corporations
Private Transporters who will value lower costs
Indian Railways
PROMOTE
– Own Your Wagons
– Rakes
For specific delivery points to long distance consumers.
For example, Kerala, North East, heavy consumption zones outside Major Cities.
METRICS
– One Month Equivalent to Stocks required in each District
– Two Months Equivalent for Defence and National Interests
Stock and flow Principle
This implies that the petroleum products stores remain fresh and regular commercial sales will be done from the same tank farm.
The Base Stock – Diesel and Petrol
Pooled Stock
1. There is a need to focus on the supply of products in proximity.
2. In a market economy, producers will strive to reduce costs and maximise profits. They will not be “greedy” but work in “self-interest”.
3. National interest has to be paid for by the Central Government and State Government.
4. In the scenario described, both capital assets and running costs will be paid for by better efficiencies.
5. Digital management to reduce costs.
6. Public participation in Equity and Bonds where and when feasible for higher returns.
7. 50 percent utilisation concurrently for flow purposes will pay for the cost of the Product Reserves.
8. There need not be heavy investment by the Central Government – participation can be restricted to 26 percent.
9. State Governments will be benefited by infrastructure creations.
10. Magisterial function in crisis will be with least disturbance to the public.
11. Any world calamity can be resolved in 60 days with alternative supply.
12. Public needs to be educated and participative not to waste petroleum products.
13. Pollution needs to be penalised.
14. Railway Rakes can be “floating” stocks and can be turned around at will, parking at midway points in loop lines or rural terminals.
15. All Defence installations can have 8 point strategic storage surrounding the installation or camps and cantonments. Defence buying should specify compulsorily 20 percent blended under stringent quality specifications, which will in turn help civilian supply quality in surrounding areas.
16. Considering the Experience of SPPR – SPPR can be a minority but strategic equity partner at 26 to 35 percent with at least 35 entities to implement this nationally over next 5 years, with Mangalore as Headquarters due to convenience and congruence.
Green Energy Promotion should be a win win win win win for the Indian economy
