POINT IAS

Strategic Oil Reserves & Energy Security

India, the world’s third largest crude oil importer has an existing storage capacity of 5.3 million tonnes at Visakhapatnam, Mangaluru and Paadoor, built at an investment of $600 million in the first phase. This is operational and can support 9.5 days of net imports. In addition, the government has approved the construction of an additional 6.5 million tonnes of strategic crude oil reserves. Strategic crude oil reserves, which are typically state-funded and meant to tackle emergency situations, allow a country to tide over short-term supply disruptions. International Energy Agency members maintain emergency oil reserves equivalent to at least 90 days of net imports. India will have oil reserves equivalent to at least 87 days of net imports, once the $1.6 billion second phase of Indian Strategic Petroleum Reserves, which aims to add 12 days of crude storage, is operational. These facilities together will help support 22 days of India’s crude oil requirements. Indian refiners also maintain 65 days of crude storage, taking the total tally to 87 days.

Categories: POINT IAS

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