New Delhi: A parliamentary standing committee has urged the government to work towards the global benchmark of maintaining 90 days of crude oil storage in the country, warning that geopolitical disruptions and supply shocks could threaten India’s energy security.
The Standing Committee on Petroleum and Natural Gas, in its report on the action taken by the government regarding the Demand for Grants 2026-27 tabled in Parliament Wednesday, flagged delays in expanding the country’s strategic petroleum reserves (SPR), repeated cuts in budget allocations for the programme and the need for better fund utilisation.
“The committee also urges (the Ministry) that the global standard of maintaining 90 days of crude oil storage within the country for strengthening the nation’s energy security may be achieved as soon as feasible,” the report said.
The committee’s recommendation comes as disruptions in global oil supply routes have highlighted the vulnerability of major oil-importing countries. India, the world’s third-largest oil importer, relies heavily on uninterrupted supplies from global markets.
The International Energy Agency (IEA), a Paris-based autonomous inter-governmental organisation of which India is not a full member, requires its member countries to maintain emergency oil stocks equivalent to at least 90 days of net oil imports. The agency currently has 32 member countries, including the US, UK, Canada, France, Germany and South Korea.
India currently has capacity to hold 5.33 million metric tonnes (MMT) of crude oil at three strategic storage facilities—Visakhapatnam (1.33 MMT) in Andhra Pradesh, Mangaluru (1.5 MMT) and Padur (2.5 MMT) in Karnataka.
These reserves can meet around nine days of the country’s crude oil requirement, while state-owned oil marketing companies (OMCs) also maintain another 65 days’ worth of supplies.
To increase the country’s strategic storage capacity and strengthen its buffer against disruptions in global oil supplies, the government approved a second phase of SPR projects in July 2021.
The government had approved two additional SPR facilities under Phase 2 in July 2021, with a combined capacity of 6.5 MMT. These comprise a 4 MMT facility at Chandikhol in Odisha and a 2.5 MMT facility at Padur in Karnataka.
However, the committee pointed out that the budget allocations for the Phase 2 of the programme have repeatedly been scaled down at the Revised-Estimate stage.
For 2023-24, the allocation was reduced from Rs 508 crore to Rs 40 crore, with no expenditure. In 2024-25, the Budget Estimate of Rs 408 crore was cut to Rs 30 crore, against which only Rs 17.25 crore was spent.
For 2025-26, the allocation was reduced from Rs 100 crore at the Budget Estimate stage to Rs 20 crore at the Revised-Estimate stage, with an expenditure of Rs 14.54 crore. In 2026-27, the allocation remains at Rs 20 crore.
The committee attributed the scaling down of funds largely to delays in finalising the bidding process, land acquisition and subsequent stages under the public-private partnership framework.
“The committee is of the view that in projects of strategic national importance, the allocated funds may be fully utilised,” the report said.
The government, in its reply, informed the committee 400 acres has been acquired at Chandikhol, and the request for proposal is under review. For Padur-II, the concessionaire agreement with the selected bidder was signed on 1 October 2025, while financial closure is under progress.
The government also highlighted that it is examining options to expand storage beyond the approved Phase 2 projects.
Indian Strategic Petroleum Reserves Limited (ISPRL), the special purpose vehicle under the Oil Industry Development Board (OIDB) that builds and manages these storage facilities has completed a feasibility study for 1.75 MMT of additional storage capacity at Mangalore, adjacent to the existing facility.
The government also informed the committee that new SPR projects at Bikaner and Bina are under consideration, with the feasibility study for Bikaner completed and the pre-feasibility study for Bina concluded.
The committee, while taking note of these steps, urged the ministry to ensure that project milestones are not delayed.
It also called for timely finalisation of requests for proposals, completion of Special Economic Zone notifications and financial closures, besides optimal utilisation of funds allocated for the projects.
The push for faster expansion reflects the strategic importance of crude storage for an economy heavily dependent on imported oil. While SPRs cannot eliminate the impact of a prolonged global supply disruption, a larger reserve can give the government more time to respond to sudden shortages, shipping disruptions or geopolitical crises.
(Edited by Viny Mishra)
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