INDIAN STRATEGIC PETROLEUM RESERVES

About:

• Meaning: A strategic petroleum reserve are essentially huge stockpiles of crude oil; an emergency store of crude oil to tide over severe supply shocks of this critical fuel.
  
  
• Global scenario: Many major global oil consumers such as the US, China and Japan have built massive strategic reserves of oil over the years, with India following up.
  
  
• Indian Strategic Petroleum Reserves Ltd (ISPRL): It is a special purpose vehicle under the Oil and Gas Ministry for constructing strategic petroleum reserves in India.
  
  
• List of strategic petroleum reserves in India:
  • ISPRL has constructed three strategic petroleum reserves at Visakhapatnam on the East Coast, and at Mangaluru and Padur on the West Coast. These facilities, with total capacity of 5.33 million tonnes, can meet 10 days of India’s crude oil requirements.
    
    
  • In July 2018, the government approved the construction of two more reserves at Chandikhol in Odisha and Padur in Karnataka, having an aggregate capacity of 6.5 million tonnes. The new facilities can provide additional supply for about 12 days.
    
    
  
  
  
• Significance:
  • India is the world’s third largest energy consumer after the US and China. But India is dependent on imports for more than 80 % of her energy needs.
    
    
  • The bulk of this oil is imported from West Asia which is often in the midst some geo-political standoff, thus making them unreliable in a conflict scenario.
    
    
  • Also, there’s always the risk of supply disruption from natural disasters, war or other calamities.
    
    
  • In short, Strategic petroleum reserves add a necessary layer to India’s energy security.
    
    
  
  
  
• Way ahead: The global practice is to maintain strategic reserves of at least 90 days of oil imports. Thus, India has a long way to go.