India to store more strategic oil

The Union Cabinet on Wednesday approved establishment of additional 6.5 Million Metric Tonne (MMT) Strategic Petroleum Reserve (SPR) facilities at two locations, i.e. Chandikhol in Odisha and Padur in Karnataka. This will prevent any crisis during disruptions of supplies of oil from abroad and also to enhance capacity of Armed forces to fight wars for longer periods.

The SPR facilities at Chandikhol and Padur will be underground rock caverns and will have capacities of 4 MMT and 2.5 MMT respectively. Government had announced setting up of two additional SPRs during the budget announcement for 2017-18. "The in principle approval is to take up the project under PPP model to reduce budgetary support of Government of India. The terms and conditions of such participation, would be determined by M/oP&NG in consultation with Ministry of Finance after conducting road shows to elicit requirements of market, including prospective investors," said the Cabinet note.

Already construction of three underground rock caverns for storage of 5.33MMT of crude oil at three locations, viz. Vishakhapatnam (1.33 MMT), Mangalore (1.5 MMT) and Padur (2.5 MMT) has completed. The total 5.33 MMT capacity under Phase-I of the SPR programme is currently estimated to supply approximately 10 days of India's crude requirement according to the consumption data for FY2016-17. Cabinet's approval for establishing additional 6.5 MMT Strategic Petroleum Reserve facilities will provide an additional supply of about 12 days and is expected to augment India's energy security.

WILL HELP INDIA FIGHT ‘LONGER’ WARS

• Modi govt’s decision to increase strategic oil reserves can enhance capacity of Armed forces to fight wars for longer period.
   
• The Cabinet decision will also help prevent any crisis during disruptions of supplies of oil from abroad.