Overview of India's Strategic Petroleum Reserves (SPRs)

India’s Strategic Petroleum Reserves (SPRs) are emergency crude oil stockpiles designed to cushion against supply disruptions. Operational since the early 2010s, SPRs are managed by Indian Strategic Petroleum Reserves Limited (ISPRL), a Special Purpose Vehicle under the Ministry of Petroleum and Natural Gas (MoPNG). The current installed capacity is 5.33 million metric tonnes (MMT) across three underground facilities: Visakhapatnam (1.33 MMT), Mangaluru (1.5 MMT), and Padur (2.5 MMT). Despite infrastructure investments exceeding ₹5,000 crore, as of March 2026, only about 64% of this capacity is filled, holding approximately 3.372 MMT of crude (ISPRL Annual Report 2026).

• SPRs are governed by the Oil Industry Development Board Act, 1975 (Section 3) and regulated under the Petroleum and Natural Gas Regulatory Board Act, 2006.
• India imports around 85% of its crude oil, with an annual import bill exceeding $120 billion (Ministry of Commerce, 2025-26).
• Two additional commercial-cum-strategic SPR facilities with a combined capacity of 6.5 MMT were announced in 2021 at Chandikhol (4 MMT) and Padur (2.5 MMT) to augment storage.

Legal and Institutional Framework

The Oil Industry Development Board (OIDB) is the statutory body responsible for petroleum sector development, including SPRs. ISPRL executes operational management, including construction, filling, and maintenance. The Petroleum and Natural Gas Regulatory Board (PNGRB) provides regulatory oversight on storage and distribution, ensuring compliance with safety and operational norms. Policy formulation and coordination rest with MoPNG, which also liaises with international bodies such as the International Energy Agency (IEA) for aligning SPR norms.

• OIDB Act, 1975 empowers the Board to develop infrastructure for oil storage and ensure energy security.
• ISPRL acts as the custodian of SPRs, responsible for crude acquisition and stock rotation.
• PNGRB Act, 2006 regulates storage and distribution to maintain market stability.

Current Status and Capacity Utilization

Despite a total capacity of 5.33 MMT, India’s SPRs are only 64% filled, equating to roughly 10 days of net import coverage. This is significantly below the IEA recommended minimum of 90 days. The underutilization exposes India to supply shocks, especially given the geopolitical volatility in West Asia, where 40-50% of India’s crude passes through the Strait of Hormuz, a critical maritime chokepoint.

• Current crude held: 3.372 MMT (64% of capacity) as of March 2026 (ISPRL Annual Report).
• Effective coverage at current fill: approximately 5 days of net imports, compared to 9.5 days if fully filled.
• Geopolitical risks in West Asia exacerbate supply vulnerabilities.

Economic Implications of SPR Underfilling

India’s oil import dependency (~85%) makes it highly susceptible to global price volatility. SPR underfilling limits the government’s ability to buffer sudden price spikes, potentially increasing inflationary pressures and widening fiscal deficits given oil’s 30% share in the energy mix. The annual crude import bill exceeding $120 billion (2025-26) underscores the economic stakes involved.

• Oil constitutes about 30% of India’s total energy consumption (MoPNG data).
• Price shocks in crude oil directly impact inflation and fiscal health.
• Underfilled SPRs reduce strategic flexibility to release stocks during crises.

Comparative Analysis: India vs United States SPRs

Critical Gaps in India’s SPR Strategy

India lacks a binding policy mandate to ensure timely filling and rotation of SPR stocks, resulting in persistent underutilization. Integration between strategic and commercial reserves remains weak, limiting comprehensive demand forecasting and coordinated response. This contrasts with global best practices where SPRs are part of a broader energy security framework including demand management and market interventions.

• No statutory obligation to maintain minimum fill levels or rotation schedules.
• Limited coordination between ISPRL and commercial oil stockholders.
• Absence of real-time demand forecasting integration with SPR management.

UPSC Relevance

Way Forward: Strengthening India’s SPR Framework

• Implement statutory mandates for minimum fill levels and periodic stock rotation.
• Accelerate filling of announced SPR expansions at Chandikhol and Padur facilities.
• Integrate SPR management with commercial reserves and demand forecasting systems.
• Enhance diplomatic engagement to secure maritime routes, especially the Strait of Hormuz.
• Explore diversification of crude import sources to reduce geopolitical risk concentration.

Practice Questions

Mains Question

Critically analyse the current status of India’s Strategic Petroleum Reserves and its implications for the country’s energy security. Suggest measures to address existing gaps. (250 words)

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