Why in the News?

India is planning to establish six new Strategic Petroleum Reserve (SPR) sites to boost energy security amid rising global oil risks.

About Strategic Petroleum Reserves (SPR):

• Overview: SPRs are emergency stockpiles of crude oil maintained by the government to manage supply disruptions caused by events like wars, embargoes, or price shocks.
• Purpose: To ensure national energy security and reduce vulnerability to external supply shocks.
• Historical Context: India realised the need for SPRs after the 1990 Gulf War, which caused supply cuts and spiking oil prices and ultimately the Balance of Payment (BoP) Crisis.
• Foundation: The SPR project began in the early 2000s based on advice from the Planning Commission’s Integrated Energy Policy.
• Governing Body: In 2004, the government set up Indian Strategic Petroleum Reserves Limited (ISPRL) as a Special Purpose Vehicle under the Oil Industry Development Board (OIDB).

• India’s three-pronged oil security framework:

1. 1. Commercial oil stocks by public and private oil marketing companies (OMCs).
   2. Strategic reserves by ISPRL for emergencies.
   3. Equity oil assets abroad through companies like ONGC Videsh Ltd. (OVL).

• Storage: Unlike commercial stocks, SPRs are stored in underground rock caverns, which are safer, more secure, and suited for long-term preservation.

Current SPR Infrastructure:

• SPR Locations: India has three active SPR sites:
  • Visakhapatnam (Andhra Pradesh)
  • Mangaluru (Karnataka)
  • Padur (Karnataka)
• Total Capacity: The combined SPR capacity is 5.33 MMT or roughly 39 million barrels.
• Coverage Duration: This reserve can meet about 9.5 days of India’s daily oil requirement (≈5.5 million barrels/day).
• Distinction from OMC Stocks: These strategic stocks are separate from commercial stocks held by companies like IOCL, HPCL, and BPCL.

Planned Expansion of SPRs in India:

• Goal: India aims to double SPR capacity due to rising geopolitical risks and import dependence.
• New Facilities Planned:
  • Chandikhol (Odisha) – 4 MMT (in two phases)
  • Padur Phase II (Karnataka) – 2.5 MMT
• 6 new SPR locations are being planned at various sites, including Mangalore SEZ (Karnataka) and salt caverns in Bikaner (Rajasthan).
• Future Capacity: After expansion, India’s total SPR stock will be 11.83 MMT, covering around 22 days of national demand.
• Strategic Vision: The long-term objective is to build up 90 days of oil reserves, in line with International Energy Agency (IEA) guidelines.

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