• Source:JND

The concerns regarding India's energy safety net have intensified amid the ongoing tensions in Middle East. In its latest report on "Demand for Grants (2026-27), the Parliamentary Standing Committee on Petroleum and Natural Gas has raised serious questions over the sluggish development of strategic Petroleum Reserve (SPR) projects and the consistent underutilisation of allocated funds.

The committee emphasised that given the volatile global geopolitical climate, India should ideally maintain a petroleum reserve equivalent to 90 days of domestic consumption. However, current data provided by the Ministry paints a different picture:

SPR Capacity: 9.5 days of supply.

Oil Marketing Companies (OMCs): 64.5 days of storage.

Total Capacity: 74 days Of consumption.

The panel recommended that the ministry accelerate efforts to meets global standards, including exploring news underground salt caverns wherever geological conditions allow, to bridge the gap.

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Stalled Phase-II Projects

India currently operates storage facilities with a capacity of 5.33 MMT (Million Metric Tonnes) in Visakhapatnam, Mangaluru and Padur, managed by the Indian Strategic Petroleum Reserves Limited (ISPRL).

To strengthen this infrastructure, the government approved Phase-II on July 8, 2021, which included two new facilities in Chandikhole (Odisha) and Padur (Karnataka) with a combined capacity of 6.5 MMT. However, five years later, these projects have shown negligible progress.

The Budgetary Disconnect

The committee expressed shock at the "lethargic" pace of development despite repeated reminders. A major highlight of the report is the drastic reduction in budgetary allocations and the failure to spend even the lowered amounts:

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Recommendations For Reform

The panel noted that the Padur-II project, intended to function under a Public-Private Partnership (PPP) model, has faced significant delays in the bidding process. The committee advised the Ministry to:

Avoid Downsising Budgets: Stop the trend of repeatedly reducing budget estimates.

Realistic Planning: Create "need-based" budgets that account for land acquisition, project readiness, and contractual milestones.

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Expedite Execution: Ensure that strategic funds are fully utilised to bring projects from paper to the ground.

Ultimately, the report suggests that if these strategic reserves had been prioritised earlier, India’s current anxieties regarding the West Asian crisis and its impact on energy security would be far less severe.


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