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Strategic Petroleum Reserve (India)

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Indian Strategic Petroleum Reserves Limited
Company typeSpecial-purpose vehicle
IndustryPetroleum
Founded2005; 19 years ago (2005)[1]
FounderMinistry of Petroleum and Natural Gas
HeadquartersOIDB Bhawan, Sector-73,
Noida, Uttar Pradesh
,
India[2]
Number of locations
4 (2020)
Area served
India
Key people
HPS Ahuja
(CEO & MD)
ServicesOil storage facilities
OwnerOil Industry Development Board (OIDB)
Websitewww.isprlindia.com

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.

ISPRL maintains an emergency fuel store of total 5.33 MMT (million metric tons) or 36.92 million barrels (5.870 million cubic metres) of strategic crude oil enough to provide 9.5 days of consumption.[3][4][5] Strategic crude oil storages are at three underground locations in Mangalore, Visakhapatnam and Padur (Udupi, Karnataka). All these are located on the east and west coasts of India which are readily accessible to the refineries. These strategic storages are in addition to the existing storages of crude oil and petroleum products with the oil companies and serve in response to external supply disruptions.[6]

Indian refiners maintain 64.5 days of crude storage, so India has overall reserve oil storage of 74 days.[7]

History

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The Gulf War in 1990 caused a sharp rise in oil prices and a massive increase to India's imports. 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. India was able to resolve the crisis through policies that liberalised the economy. However, India continued to be impacted by the volatility of oil prices. In 1998, the Atal Bihari Vajpayee administration proposed building petroleum reserves as a long-term solution to managing the oil market.[8] Three storage facilities were built in underground locations in Mangalore, Visakhapatnam and Padur. A total of 5.33 MMT (million metric tons) storage capacity was built at an investment of $600 million in the first phase.[9]

In the 2017-18 budget speech by the Indian finance minister Arun Jaitley, it was announced that two more such caverns will be set up Chandikhole, Odisha and Bikaner in Rajasthan as part of the second phase. [10] In June 2018, the Narendra Modi administration approved the construction of a new storage facility in Chandikhole and doubling the capacity at Padur. This would raise India's strategic reserve capacity to 11.83 million tonnes.[8]

Apart from this, India is planning to expand more strategic crude oil facilities in second phase at Rajkot in Gujarat.[3]

Storage capacity

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Sr. No. Location Capacity
(Million Metric Tonnes)
Commissioned Planned
1 Visakhapatnam, Andhra Pradesh 1.33 -
2 Mangalore, Karnataka 1.5 -
3 Padur, Karnataka 2.5 2.5
4 Chandikhole, Odisha - 4[9]
TOTAL 5.33 6.5

See also

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References

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  1. ^ "India wants to add UAE, Saudi oil for strategic reserve". Reuters. 21 September 2016. Retrieved 15 March 2019.
  2. ^ "Contact us". Indian Strategic Petroleum Reserves Limited. Retrieved 15 March 2019.
  3. ^ a b "Store Our Oil And Take Two-Thirds For Free: UAE's Offer to India". NDTV. 10 February 2016. Retrieved 10 February 2016.
  4. ^ Singh, Sudheer Pal (23 December 2015). "Filling of strategic oil reserves delayed". Business Standard India. Retrieved 23 December 2015.
  5. ^ Alexander's Gas & Oil Connections - India to build up storage of crude oil Archived 2009-04-18 at the Wayback Machine
  6. ^ "Indian Strategic Petroleum Reserves Limited". Retrieved 29 January 2016.
  7. ^ "India to leverage low prices to fill strategic crude oil reserves". 17 March 2020.
  8. ^ a b "Why India is storing crude oil in underground caves, and who came up with the idea". The Financial Express. 29 June 2018. Retrieved 30 March 2020.
  9. ^ a b Bhaskar, Utpal (17 March 2020). "India to leverage low prices to fill strategic crude oil reserves". Livemint. Retrieved 30 March 2020.
  10. ^ "Government to build 2 crude oil storages in Odisha, Rajasthan". Economic Times. Retrieved 2 January 2016.
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