India’s Strategic Petroleum Reserves (SPRs): Energy Security Challenge

Context

India’s Strategic Petroleum Reserves (SPRs) are currently filled only 64% (3.37 out of 5.33 million tonnes). This has raised concerns about India’s preparedness against global oil supply disruptions, especially during the ongoing West Asia conflict.

Q1. What are Strategic Petroleum Reserves (SPRs) and why are they important for energy security?

1. SPRs are emergency crude oil storage (backup fuel reserve for emergencies) maintained by governments. They are used when oil supply is disrupted or prices rise suddenly.
2. They are different from normal oil stocks:
   1. Normal stocks → used daily by companies
   2. SPRs → used only during crisis situations

Q2. What is the historical background of SPRs and why were they created?

1. The idea started after the 1973 Oil Crisis, when oil supply was suddenly cut.
2. This showed that countries need backup oil storage for emergencies.
3. Since then, countries like the US, China, and Japan built large reserves.

Q3. What is the current status of India’s SPR infrastructure and storage capacity?

1. Managed by Indian Strategic Petroleum Reserve Limited (ISPRL)
2. Existing storage locations:
   1. Visakhapatnam (Andhra Pradesh) → 1.33 million tonnes
   2. Mangaluru (Karnataka) → 1.5 million tonnes
   3. Padur (Karnataka) → 2.5 million tonnes
3. Total capacity is 5.33 million tonnes but current storage is at 3.37 million tonnes (~64%). If fully filled, SPRs can cover only ~9.5 days of India’s oil needs
4. This number is not fixed, it keeps changing based on oil purchase, consumption & market conditions.

Q4. What are the planned expansions of India’s SPRs?

1. Approved projects (2021):
   1. Chandikhol (Odisha) → 4 million tonnes
   2. Padur expansion → 2.5 million tonnes
2. Proposed (not yet approved):
   1. Bikaner (Rajasthan)
   2. Rajkot (Gujarat)
3. These projects are slow or pending, increasing risk.

Q5. What are the major gaps and concerns in India’s SPR system?

1. Very low coverage → only ~9.5 days
2. Storage not fully used → only 64% filled
3. Expansion projects delayed
4. Weak protection during long global crises
5. This makes India’s energy buffer weak at a critical time

Q6. What is India’s overall oil dependency and why is it risky?

1. India is the 3rd largest oil consumer in the world (Imports ~88% of its crude oil needs).
2. This means India depends heavily on global markets and any disruption (war, supply cut) can lead to serious impacts.

Q7. How does India compare with global standards like the IEA benchmark?

1. IEA recommendation: Maintain 90 days of oil reserves
2. India’s position:
   1. Total (SPR + commercial stock) → ~74 days
   2. SPR alone → ~9.5 days
3. India is below the global safety standard

Q8. Why is expanding SPRs urgently needed?

1. Global risks like West Asia conflict and disruption in Strait of Hormuz.
2. Key reasons:
   1. High import dependence
   2. Rising oil demand
   3. Very low emergency buffer
3. Current SPR capacity is too small for long crises

Q9. What is the commercial importance of SPRs?

1. SPRs are not only for emergencies but also useful economically:
   1. Price advantage:
      1. Buy oil when prices are low
      2. Use/sell when prices rise
   2. Storage leasing: Can rent storage to foreign companies
2. Example:
   1. Agreement with ADNOC (UAE)
   2. Uses 7,50,000 tonnes storage in Mangaluru

Conclusion

India’s SPR system is not strong enough for long-term energy security. Strengthening it through capacity expansion, better utilisation, and strategic planning is essential to handle future global crises.