India Plans New Strategic Oil Reserves to Enhance Energy Security
India is taking significant steps to enhance its energy security by planning the construction of three new strategic oil storage facilities. This initiative, announced by the CEO of the Indian Strategic Petroleum Reserve Ltd, aims to bolster the country’s emergency reserves amid rising fuel demand. Currently, India relies heavily on imports for over 80% of its oil needs, making these developments crucial for reducing vulnerability to global supply disruptions.
Expansion of Strategic Oil Reserves
The Indian government is actively working on expanding its strategic petroleum reserves to better prepare for potential supply disruptions. According to L R Jain, the CEO of Indian Strategic Petroleum Reserve Ltd, Engineers India Ltd, a state-run engineering consultancy, is conducting feasibility studies for the new facilities. The proposed reserves include a significant 5.2 to 5.3 million-ton capacity facility in salt caverns at Bikaner, located in Rajasthan, and an additional 1.75 million-ton facility in Mangalore, Karnataka. Furthermore, plans are underway for another reserve in Bina, Madhya Pradesh, with its capacity yet to be determined. These projects will require approval from the Union cabinet once feasibility assessments are completed. The new facilities will complement existing reserves, which include a 2.5 million-ton facility at Padur and a 4 million-ton installation at Chandikhol in Odisha.
Policy Changes to Enhance Oil Storage
India’s strategic petroleum reserve policies are undergoing significant changes to incorporate private sector participation and commercialization. This shift aligns with practices in countries like Japan and South Korea, where private companies are allowed to trade crude oil. Jain emphasized the need for 90 days of reserves to meet rising fuel demand in India. Currently, the country’s combined storage capacity, including company holdings and supplies in transit, can sustain fuel requirements for approximately 75 days. The expansion of oil storage facilities is also a strategic move to facilitate India’s membership in the International Energy Agency, which mandates that member countries maintain sufficient oil reserves for 90 days of consumption.
Geopolitical Considerations and Energy Security
As the world’s third-largest oil importer, India is acutely aware of the geopolitical risks associated with its oil supply chain. The country imports over 80% of its crude oil, making it vulnerable to disruptions caused by international conflicts or market fluctuations. By diversifying its sources of crude oil and increasing its strategic reserves, India aims to mitigate these risks and enhance its energy security. The proposed storage facilities are part of a broader strategy to ensure that the nation can withstand potential supply shocks and maintain stability in its energy sector. This proactive approach reflects India’s commitment to securing its energy future amidst a rapidly changing global landscape.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
