India’s strategic crude oil reserve can cover just 9.5 days of demand at full capacity, with current stock levels showing the buffer is substantially lower in reality, according to a reply to a right to information (RTI) request filed by India Today and government data.
Strategic reserves are emergency stockpiles of crude oil, protected from normal use, held by the government. They are meant to deal with supply disruptions or sudden price increases. These reserves are used during conflicts or supply shocks, when the oil supply suddenly decreases or increases, to ensure critical sectors continue to receive fuel.
India holds roughly 64 pc of its total crude oil storage capacity
According to data presented on March 23 in the Rajya Sabha, India holds around 3.372 million metric tonne of crude oil, which roughly makes up 64 per cent of its total capacity at 5.33 million metric tonne.
The data shows that the country’s actual oil reserves are well below the 9.5-day maximum capacity.
The RTI response from the Ministry of Petroleum and Natural Gas says India’s emergency reserves can meet nine-and-a-half days of crude oil requirement if there are any import disruptions. However, it assumes that the storage is used to its full capacity.
This gap between capacity and stock currently holds significance because there is growing pressure on global energy markets with the escalating tensions in West Asia, which holds a significant portion of India’s crude oil imports.
The conflict has already triggered unpredictability in crude oil prices, as the Strait of Hormuz, a critical supply route, has been closed, with only a specific number of ships being allowed to pass through.
Government claims actual reserve is constantly changing
Further escalation in the ongoing war could have a severe impact on the supply chains and increase prices, effectively risking economies like India, which are import-dependent, as it imports more than 85 per cent of its crude oil needs.
The Government of India has, however, stated that the actual reserve is dynamic, depending on consumption patterns and stock levels.
The Strategic Petroleum Reserve (SPR) programme was approved on January 7, 2004, and Indian Strategic Petroleum Reserves Limited (ISPRL) was established on June 16, 2004, according to the RTI.
Presently, India’s SPR capacity is situated in Visakhapatnam, with 1.33 million metric tonne, Mangaluru, with 1.5 million metric tonnes, and Padur, with 2.5 million metric tonne.
The RTI confirmed that the government authorised the expansion of the SPR network in 2021, with two more facilities commissioned, bringing the total expansion to 6.5 million metric tonne.
Since the projects are still pending and the existing reserves are not full, the data raises concerns about India’s strategic oil reserve, especially at a time when global supply risks remain high.
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