The Centre has stressed the need to build strategic reserves of imported coal and gas as was being done for petroleum products.
Why need strategic reserves for Coal and Gas?
- Many countries have started keeping strategic reserves, because when it comes to a crunch, every country will meet its needs first.
- Russia has curtailed gas supply to Europe because they want more gas to be consumed within their country.
- There is a surge in power demand combined with a fall in imports due to high global coal prices have led to supply disruptions.
Do you know?
In 1998, the AB Vajpayee administration proposed building petroleum reserves as a long-term solution to managing the oil market.
What are Strategic Reserves?
- Indian refiners maintain 64.5 days of crude storage, so India has overall reserve oil storage of 74 days
- Indian Strategic Petroleum Reserves Limited (ISPRL) is an Indian company responsible for maintaining the country’s strategic petroleum reserves.
- ISPRL is a wholly-owned subsidiary of the Oil Industry Development Board (OIDB), which functions under the administrative control of the Ministry of Petroleum and Natural Gas.
- It maintains an emergency fuel store of total 5.870 million cubic meters of strategic crude oil enough to provide 9.5 days of consumption.
SPRs in India
| S. No. | Location | Capacity |
| 1 | Visakhapatnam, Andhra Pradesh | 1.33 million tonnes |
| 2 | Mangalore, Karnataka | 1.5 million tonnes |
| 3 | Padur, Karnataka | 2.5 million tonnes and an additional 2.5 million tonnes under construction |
| 4 | Chandikhol, Odisha | 4 million tonnes (under construction) |
Why were SPRs created?
- Gulf War, 1990: It caused a sharp rise in oil prices and a massive increase to India’s imports.
- Forex fluctuations: During the subsequent 1991 Indian economic crisis, foreign exchange reserves could barely finance three weeks’ worth of imports while the government came close to defaulting on its financial obligations.
- Price volatility: India was able to resolve the crisis through policies that liberalized the economy. However, India continued to be impacted by the volatility of oil prices.
How are they constructed?
- The crude oil storages are constructed in underground rock caverns and are located on the East and West coasts of India.
- Crude oil from these caverns can be supplied to the Indian Refineries either through pipelines or through a combination of pipelines and coastal movement.
- Underground rock caverns are considered the safest means of storing hydrocarbons.
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