India's strategic petroleum reserves can sustain the country for 74 days in the event of global supply disruptions, according to Oil Minister Hardeep Singh Puri. Puri addressed the Rajya Sabha on Monday, emphasizing the government's focus on energy security amidst geopolitical uncertainty. He stated that a rapidly growing economy like India requires a robust and secure petroleum reserve to mitigate vulnerabilities during global supply disruptions.
Puri highlighted India's strong refining capabilities, with refineries located across both the western and eastern coasts. He noted that India is the world's third-largest consumer of crude oil and the fourth-largest in refining capacity, currently processing around 260 million metric tonnes per annum, with plans to expand to 320 million metric tonnes per annum. Additionally, India ranks as the world's fifth-largest exporter of petroleum products.
The strategic petroleum reserve is designed to ensure adequate stock during severe global crises. The International Energy Agency (IEA) recommends that countries maintain reserves equivalent to 90 days of consumption. India calculates its reserves by combining stocks held in underground caverns, refineries, floating storage, and petroleum products at ports. The country's reserves in underground caverns are located in Andhra Pradesh and Karnataka, with plans to expand to Odisha.
The Minister stated that the government, via Indian Strategic Petroleum Reserve Limited (ISPRL), has established strategic petroleum reserve facilities with a total capacity of 5.33 Million Metric Tonnes (MMT) of crude oil across three locations in Andhra Pradesh and Karnataka. ISPRL currently holds approximately 4.094 MMT of crude stock, which is about 77% of the total storage capacity. ISPRL utilizes 50% of the total storage capacity for commercial activities.
Puri noted the fluctuations in crude oil prices since the first purchase of crude oil for filling the reserves in 2015, ranging from a high of USD 80.08 per barrel in October 2018 to a low of USD 19.90 per barrel in April 2020 during the COVID-19 pandemic, and reaching USD 112.87 per barrel in March 2022. Taking advantage of low crude oil prices in April/May 2020, Strategic Petroleum Reserves (SPR) were filled to full capacity, leading to notional savings of approximately Rs 5,000 crore.
While India's current reserves can cover 74 days, falling short of the IEA's 90-day recommendation, Puri expressed confidence in the current level, considering it a crucial component of economic stability and energy security. He indicated that increasing the reserve capacity could be considered in the future.