Strategic Petroleum Reserve (SPR)
Context:
Amidst escalating tensions in West Asia—triggered by recent strikes involving Israel, the U.S., and Iran—concerns regarding India's fuel stock position have re-emerged.
The government has confirmed that India is comfortably placed, holding sufficient stocks of crude oil for 25 days and refined energy products (petrol and diesel) for another 25 days, cumulatively accounting for 50 days of sufficiency.
Crucially, this baseline reserve calculation excludes the emergency-earmarked Strategic Petroleum Reserve (SPR).
To constantly monitor this supply position, the Petroleum and Natural Gas Ministry has established a 24x7 control room.
What is SPR?
A Strategic Petroleum Reserve (SPR) is an emergency stockpile of crude oil stored in underground rock caverns and controlled by the government.
Why SPR?
High Import Dependency:
India is heavily reliant on imported oil, meeting nearly 85-90% of its crude oil needs from foreign sources.
Vulnerability:
This massive dependency exposes the Indian economy to global supply disruptions and price shocks stemming from geopolitical tremors, whether it is the Russia-Ukraine conflict, Middle East tensions, or attacks near the Red Sea.
Strategic Leverage:
Expanding the SPR not only cushions the economy from petroleum price shocks but also bolsters India's strategic and diplomatic leverage as it actively works towards membership in the International Energy Agency (IEA).
Current Infrastructure (Phase I):
The Government of India manages these reserves through a Special Purpose Vehicle (SPV) known as Indian Strategic Petroleum Reserve Limited (ISPRL).
Currently, ISPRL has established SPR facilities with a total capacity of 5.33 Million Metric Tonnes (MMT) of crude oil at three key locations:
Visakhapatnam (Andhra Pradesh): 1.33 MMT
Mangaluru (Karnataka): 1.5 MMT
Padur (Karnataka): 2.5 MMT.
Expansion Plans (Phase II):
Recognizing the risks, the government approved (in 2021) the establishment of two additional commercial-cum-strategic petroleum reserve facilities.
These will operate on a Public-Private Partnership (PPP) mode, adding 6.5 MMT of storage capacity:
Chandikhol, Odisha: 4 MMT
Padur, Karnataka: 2.5 MMT (an addition to the existing facility).
Broader Energy Security Strategy:
To ensure the security of crude supplies and mitigate the risk of single-region dependence, Indian Public Sector Undertakings (PSUs) have actively diversified their crude basket to include the Middle East, Africa, North America, and South America.
Furthermore, the government has adopted a multi-pronged approach to promote alternative fuels.
This includes substituting demand with natural gas and promoting the Ethanol Blended Petrol (EBP) Programme, Biodiesel, Green Hydrogen, Electric Vehicles (EVs), and the Sustainable Alternative Towards Affordable Transportation (SATAT) initiative for Compressed Biogas (CBG).