STRATEGIC PETROLEUM RESERVES (SPRS)

NEWS: Stockpiles of crude oil maintained by governments to ensure a stable supply of oil during emergencies

Meaning

• Strategic Petroleum Reserves (SPRs)à Stockpiles of crude oil maintained by governments to ensure a stable supply of oil during emergencies, such as:
  • Geopolitical conflicts, War, Supply disruptions, Oil price shocks
• Usually stored in underground rock caverns and act as a national energy security buffer.

SPRs- Important

• Maintain energy security
• Protect economy from oil price volatility
• Ensure supply during war or global crisis
• Support national growth and development

For India:

• Imports around 85–88% of crude oil
• Is the third-largest oil consumer
• Vulnerable to: West Asia conflicts, Strait of Hormuz disruptions, Global oil shocks
• Thus, SPR = National Energy Security Tool

International Energy Programme (IEP) Agreement

• Every IEA member country àmust maintain emergency oil reserves equal to 90 days of net oil imports.
• In case of severe disruption, members can collectively release oil stocks.
• India became an Associate Member of the IEA in 2017.

Strategic Petroleum Reserves in India

Institution Responsible

• Indian Strategic Petroleum Reserves Ltd. (ISPRL)
• Established in 2004
• Special Purpose Vehicle (SPV)
• Under the Ministry of Petroleum & Natural Gas

Existing SPR Capacity in India

India currently has a total capacity of: 5.33 Million Metric Tonnes (MMT)

Locations

Location

• Visakhapatnam, Andhra Pradeshà 33 MMT
• Mangaluru, Karnatakaà 5 MMT
• Padur, Karnatakaà 5 MMT