Parliament panel pushes for 90-day crude oil reserves, flags delays in strategic expansion
The Standing Committee on Petroleum and Natural Gas recommended that India work toward maintaining 90 days of crude oil storage, describing it as the global benchmark for energy security
The committee flagged repeated budget cuts and delays in the Phase 2 expansion of India's Strategic Petroleum Reserves (SPR)
Allocations for SPR expansion were cut sharply in successive years — from ₹508 crore (budgeted) to ₹40 crore in 2023-24, from ₹408 crore to ₹30 crore in 2024-25, and from ₹100 crore to ₹20 crore in 2025-26
The panel's recommendation comes amid heightened concern over disruptions to global oil supply routes
India's Strategic Petroleum Reserve (SPR) Programme
India's SPR programme is managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a special purpose vehicle under the Ministry of Petroleum and Natural Gas, set up in 2004 following the Gulf War-era supply-disruption concerns. Unlike the buffer stocks held by oil marketing companies (OMCs) for operational purposes, SPR crude is an emergency reserve meant to cushion the economy against a sudden supply shock, stored in underground rock caverns for safety and cost efficiency.
Key Details
- Phase 1 facilities (operational): Visakhapatnam, Andhra Pradesh (1.33 MMT); Mangaluru, Karnataka (1.5 MMT); Padur, Karnataka (2.5 MMT) — total 5.33 MMT, providing cover for roughly 9-10 days of India's crude requirement
- Adding OMC-held commercial reserves (about 65 days), India's total effective cover is around 74 days — short of the 90-day benchmark
- Phase 2 (approved 2021): a 4 MMT cavern at Chandikhol, Odisha, and a further 2.5 MMT expansion at Padur, Karnataka — together adding 6.5 MMT
- ISPRL has stated an ambition to triple total capacity to about 15 MMT over the next decade, including sites under consideration at Bikaner and Bina
The committee's flagged funding cuts directly affect the Phase 2 caverns (Chandikhol and Padur-II) that are meant to close India's gap with the 90-day benchmark; underspending in successive budgets has delayed the projects meant to raise cover from about 9-10 days (SPR alone) toward the target.
The IEA 90-Day Stockholding Norm
The 90-day benchmark originates from the International Energy Agency (IEA), established in 1974 after the 1973 oil crisis, under the Agreement on an International Energy Program. Each IEA member (except net-exporting Canada, Mexico and Norway) is obligated to hold oil stocks equal to at least 90 days of net imports, usable for coordinated emergency response during severe global supply disruptions.
Key Details
- IEA membership requires net-importer countries to maintain the 90-day cover using stocks that exclude military reserves, in-transit tanker cargo, pipeline stocks, and end-consumer holdings
- India is not a full IEA member but became an IEA Association country in 2017, without a binding stockholding obligation, though the 90-day figure is treated as the international good-practice standard
- The IEA can authorise a coordinated release of member emergency stocks during a supply crisis, as it did in 2026 amid disruptions linked to the wider Middle East conflict
Although India has no binding IEA obligation, the committee explicitly invokes the IEA's 90-day figure as the benchmark India should target, underlining that current SPR-plus-OMC cover of about 74 days still falls short.
Energy Security as a Non-Traditional Security Concern
Energy security is increasingly treated as a component of national security planning because prolonged supply disruption can affect economic stability, defence logistics, and critical infrastructure. India's dependence on imported crude — meeting more than 85% of domestic consumption through imports — makes uninterrupted supply a strategic vulnerability, not merely a commercial one.
Key Details
- India's crude oil import dependency stood at over 85% in recent years, sourced from more than 40 countries to diversify risk
- Strategic reserves, along with diversification of import sources and long-term supply contracts, are the principal instruments used to manage this vulnerability
- The Ministry of Petroleum and Natural Gas coordinates with the Ministry of External Affairs and the National Security Council Secretariat on assessments of supply-route risk (e.g., chokepoints such as the Strait of Hormuz)
The committee's push for faster SPR expansion reflects a securitisation of energy policy — treating reserve capacity as critical infrastructure resilience rather than a routine budget line item, especially given ongoing disruptions to Gulf shipping routes.
- India's current operational SPR capacity: 5.33 MMT across Visakhapatnam (1.33 MMT), Mangaluru (1.5 MMT), Padur (2.5 MMT) — about 9-10 days of cover
- Combined SPR + OMC commercial stock cover: approximately 74 days
- IEA benchmark: 90 days of net import cover for member countries
- Phase 2 expansion (approved July 2021): Chandikhol (Odisha, 4 MMT) + Padur-II (Karnataka, 2.5 MMT) = 6.5 MMT additional capacity
- SPR budget cuts flagged by the committee: 2023-24 (₹508 crore to ₹40 crore, nil spent), 2024-25 (₹408 crore to ₹30 crore, ₹17.25 crore spent), 2025-26 (₹100 crore to ₹20 crore, ₹14.54 crore spent)
- ISPRL long-term target: triple capacity to about 15 MMT within a decade