The government has allowed Abu Dhabi National Oil Company (Adnoc) to export its crude kept in the country’s underground storage facility at Mangalore to give greater operational freedom to the foreign company, an order of the commerce ministry said.

Crude oil, the raw material for producing fuels like petrol and diesel, is not allowed to be exported except through the state-owned Indian Oil Corporation (IOC).

In an order, the ministry said the condition of export being allowed only through IOC will continue, but “AMI (Adnoc Marketing International (India) is exempted from STE conditions and is allowed to re-export crude oil from their commercial stockpile at Mangalore strategic petroleum reserve, at their own cost”.

India, the world’s third-biggest oil importer and consumer, imports over 85 per cent of its oil needs. It has built strategic storages at three locations to store up to 5.33 million tonnes (mt) of oil as insurance against any supply disruption.

The storage at Visakhapatnam (1.33mt) in Andhra Pradesh, Mangalore (1.5mt), and Padur (2.5mt) in Karnataka can meet about nine days of national demand.

The Indian Strategic Petroleum Reserve Ltd has leased half of the 1.5 million tonne capacity in Mangalore storage to Adnoc. The remaining was retained by ISPRL.

The idea behind leasing the storage to foreign companies was that they could store oil for sale to domestic refiners. But in case of an emergency, India held the first right on oil usage.

Adnoc had sought permission to export its oil from the cavern in cases where it could not find buyers in Indian refiners. After the notification, Adnoc can export oil stored in the Mangalore storage.