A new report by the Council on Energy, Environment and Water (CEEW) has highlighted that India's strategic petroleum reserves (SPRs) can cover only 9-10 days of the country's crude oil imports. This is significantly lower than global peers like Japan and South Korea, which maintain reserves sufficient for over 200 days.
Current State of India's Strategic Reserves
The report notes that India currently has SPR capacity of about 5.33 million tonnes, equivalent to roughly 39 million barrels. However, given the nation's massive import dependence—over 85% of its crude oil needs are met through imports—this reserve is inadequate for prolonged disruptions.
Comparison with Global Peers
In contrast, Japan and South Korea have strategic reserves that can sustain their economies for more than 200 days. The United States, a major oil producer, also maintains reserves covering around 90 days of imports. The CEEW report underscores that India's reserve levels are among the lowest for major oil-importing nations.
Recommendations for Improvement
The report recommends that India expand its SPR capacity to at least 90 days of net imports, in line with International Energy Agency (IEA) guidelines. It suggests building additional storage facilities and exploring options like underground caverns and floating storage.
Energy Security Concerns
Energy security is a critical issue for India, which is the world's third-largest oil consumer. The report warns that any supply disruption could severely impact the economy, given the country's reliance on crude oil for transportation, industry, and power generation.
Government Initiatives
The Indian government has taken steps to enhance SPRs, including plans to develop a second phase of storage at Chandikhol in Odisha and Padur in Karnataka. However, progress has been slow, and the CEEW report calls for accelerated efforts.
In summary, the CEEW report stresses the urgent need for India to bolster its strategic petroleum reserves to mitigate risks from global oil market volatility and geopolitical tensions.
