Government Steps to Strengthen Strategic Petroleum Reserves

India has established Strategic Petroleum Reserves (SPR) to enhance energy security and mitigate supply disruptions. Managed by Indian Strategic Petroleum Reserve Ltd. (ISPRL), the country has 5.33 MMT storage capacity across Visakhapatnam, Mangaluru, and Padur. Expansion plans include Chandikhol (4 MMT) and Padur (2.5 MMT) under a PPP model. To reduce dependence on fossil fuels, India promotes natural gas, biofuels, and renewables. SPRs ensure 90 days of oil reserves per IEA guidelines. India strategically filled its reserves during the 2020 oil price slump, saving ₹5000 crore, reinforcing its commitment to energy security and supply diversification.

Introduction:

The Indian Strategic Petroleum Reserve Limited (ISPRL) as an SPV under governmental supervision established Strategic Petroleum Reserve (SPR) storage facilities with total capacity at 5.33 MMT of crude oil at:

Expansion Plans

The Government received approval in July 2021 to proceed with the development of two extra commercial-and-strategic petroleum reserve facilities which will reach 6.5 MMT in total storage capacity.

The facilities will be established through a Public-Private Partnership (PPP) model. Government agents with Oil Marketing Companies operate continuous assessments to determine storage facility enlargement options alongside exploring new petroleum reserve sites.

Diversification of Crude Supply Sources

Indian Oil Public Sector Undertakings (PSUs) preserve crude security through multiple crude procurement sources from Middle East and Africa and North America and South America.

1. Middle East

2. Africa

3. North America

4. South America

The foreign supply of LNG to India extends to three new nations through Australian, United States and United Arab Emirates destinations. Indian Oil Public Sector Undertakings have established long-term contracts that guarantee continuous LNG provisions and shield against pricing instability.

Strategies to Reduce Fossil Fuel Dependence

The Government implements multiple approaches for embracing cleaner energy alternatives through the following strategy:

• The implementation of natural gas throughout the economy helps establish a gas-based system.

• The promotion of renewable and alternative fuel options including ethanol and its second-generation parallel ethanol production along with compressed bio-gas fuel and biodiesel and Green Hydrogen technology and electric vehicles (EVs) will take place.

• Energy Saving enhancements in refinery operational methods now receive attention for better energy management.

• The government must implement policies which will increase production of domestic petroleum resources and natural gas reserves.

• Through Sustainable Alternative Towards Affordable Transportation (SATAT) the government aims to increase consumption of Compressed BioGas (CBG) as a vehicle fuel.

• National agencies should advance biofuel initiatives by expanding the operations of the Ethanol Blended Petrol (EBP) Programme and the Biodiesel Blending Programme.

Understanding Strategic Petroleum Reserves

• A majority of nations operate Strategic Petroleum Reserves which provide crude oil stockpiles used to maintain supply continuity during geopolitical crises and disruptions. 

• The energy reserves act as a fundamental element which ensures continuous energy supply required for national progress.

International Energy Agency (IEA) Guidelines

• Member countries of the International Energy Programme (I.E.P.) agreement must keep sufficient oil reserves that match 90 days worth of their net oil imports.

• IEA members jointly release their emergency stockpiled oil when a severe oil supply disruption occurs in order to maintain market stability.

• India joined the IEA as an associate member when it did so in 2017.

Historical Context of Strategic Reserves in India

• During the 1990 Gulf War India fell into an energy crisis because it possessed oil reserves that lasted only three days.

• In 1998 the Government of Atal Bihari Vajpayee initiated a plan to develop SPR facilities.

• India faces rising power consumption that has made it necessary to build strategic oil reserves.

Global Strategic Petroleum Reserves

The highest capacities for strategic petroleum reserves exist in these nations:

• United States - 714 million barrels

• China - 475 million barrels

• Japan - 324 million barrels

Conclusion

India maintains a sustained expansion of SPR facilities because it prioritizes both energy security and supply diversity and seeks to transition away from fossil fuels by embracing cleaner power alternatives.