India’s crude oil and gas reserves and why we are lagging on this count

Source: The post “India’s crude oil and gas reserves and why we are lagging on this count” has been created, based on “All you want to know about India’s crude oil and gas reserves and why we are lagging on this count” published in “BusinessLine” on  20th March 2026.

UPSC Syllabus: GS Paper-2- Economy

Context: Energy security is a critical component of economic stability, especially for an import-dependent country like India. In the context of rising geopolitical tensions, particularly in West Asia, maintaining adequate reserves of crude oil and gas has become increasingly important.

Importance of Strategic and Commercial Reserves

1. Fossil fuel storage capacity acts as a buffer against supply disruptions caused by geopolitical conflicts, natural disasters, and technical failures.
2. Strategic reserves help ensure continuity of economic activities during crises.
3. These reserves also reduce vulnerability to global price volatility and external pressure.
4. They act as a deterrent against the use of energy supplies as a geopolitical tool.

Status of Crude Oil Reserves in India

1. India maintains a combined crude oil and petroleum product buffer of approximately 74 to 90 days of consumption.
2. Strategic reserves managed by Indian Strategic Petroleum Reserves Limited have a total capacity of 5.33 MMT.
3. These reserves provide around 9.5 days of crude oil coverage and are about 80% filled.
4. The reserves are located at Visakhapatnam, Mangaluru, and Padur.
5. Oil Marketing Companies maintain commercial stocks equivalent to about 64.5 days of consumption.
6. The government has approved an additional 6.5 MMT capacity under a Public-Private Partnership model.
7. India plans to expand total strategic storage capacity to 15 MMT in the coming decade.

Status of LPG Storage in India

1. India’s LPG storage capacity is critically low, covering less than two days of national consumption.
2. The country relies mainly on operational storage rather than strategic reserves.
3. Major storage facilities include Visakhapatnam and Mangaluru with a combined capacity of about 1.4 lakh tonnes.
4. The infrastructure is designed for rapid distribution rather than long-term storage.

Status of Natural Gas Storage

1. India currently does not have a dedicated strategic natural gas reserve system.
2. The government is planning to establish strategic gas reserves in response to recent supply shocks.
3. A proposal to mandate additional storage capacity at LNG terminals is under consideration.
4. Feasibility studies are being conducted for new storage sites, including salt caverns.

Reasons for India Lagging in Strategic Storage

1. India’s energy infrastructure has historically prioritised efficient distribution over long-term storage.
2. Earlier availability of cheap and abundant global LPG reduced the urgency for building reserves.
3. Geological constraints limit the availability of suitable locations such as salt caverns.
4. High capital costs make large-scale storage projects economically challenging.
5. Land acquisition issues, local resistance, and administrative delays slow down project implementation.
6. Policy focus has been reactive rather than proactive in building strategic reserves.

Global Comparison

1. Countries like Japan maintain large strategic reserves sufficient for about 146 days of imports.
2. China has developed massive storage capacity and is continuously expanding it.
3. South Korea has an advanced and integrated oil and gas storage system.
4. Singapore maintains large reserves due to its role as a global energy trading hub.

Way Forward

1. India should expand its strategic petroleum reserves to meet international benchmarks of at least 90 days of imports.
2. There is a need to develop dedicated strategic reserves for LPG and natural gas.
3. Public-Private Partnerships should be encouraged to finance storage infrastructure.
4. Faster land acquisition and streamlined clearances are required to avoid delays.
5. Advanced technologies and alternative storage solutions should be explored.

Conclusion: While India has made progress in crude oil storage, significant gaps remain in LPG and natural gas reserves. Strengthening strategic storage capacity is essential for enhancing long-term energy security and economic resilience.

Question: Discuss the status of India’s crude oil and gas reserves. Why is India lagging in building strategic energy storage compared to other major economies?

Source: BusinessLine