India Boosts Strategic Petroleum Reserves Amid Global Supply Fears

India is expanding its Strategic Petroleum Reserves (SPR) to protect against global supply disruptions, aiming to reach a 90-day reserve target. The current SPR capacity stands at 5.33 million metric tonnes, but with new facilities under construction, the total will increase to 11.88 million metric tonnes.

The Phase II expansion project is already in progress, with new capacity being added at Chandikhol in Odisha and an additional facility in Padur, Karnataka. This expansion is a key step toward meeting the International Energy Agency's recommended 90-day inventory benchmark for member nations.

India is also addressing vulnerabilities in its Liquefied Petroleum Gas (LPG) and Liquefied Natural Gas (LNG) supplies. Proposals are being evaluated to create 25-40 days of strategic LPG reserves using underground salt caverns, which offer a safer and more efficient storage method.

The government's long-term plan is to protect the economy from global supply shocks by balancing government-held physical reserves with commercial stocks held by domestic refiners. The effectiveness of this policy will depend on the implementation of a transparent release mechanism that allows for controlled stock usage during extreme price volatility.