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Supply disruptions linked to West Asia have pushed the government to consider a decade-long strategic fuel programme that would, for the first time, extend India's strategic reserves beyond crude oil.
The programme under consideration would add roughly 28 million tonnes of crude storage, 9 million tonnes of LNG storage and 4 million tonnes of LPG storage over ten years.
The reserves are intended to cover about two months of crude and LNG demand and about six weeks of LPG demand.
The plan, estimated at around $42 billion, could be financed partly through levies on LPG and natural gas users, potentially raising about $1.5 billion a year.
India's existing underground strategic crude storage under Phase-I is 5.33 million tonnes at Visakhapatnam, Mangaluru and Padur; it has only about 0.14 million tonnes of underground LPG capacity and no operational underground natural gas storage at all.
A storage facility has a physical capacity, but the fuel actually sitting in it varies, and not all of it is immediately accessible. In a crisis the number that matters is not how many tonnes could be stored but how much fuel is available and at what rate it can be withdrawn and delivered to consumers. LNG causes particular confusion because India already has substantial import and regasification infrastructure: a regasification terminal can receive LNG and turn it back into gas, but its regasification capacity is throughput, not strategic inventory. Underground gas storage works differently again — the LNG is first regasified and the resulting natural gas is injected into a depleted reservoir or a cavern, from which it can later be withdrawn.
Simple Analogy: A large kitchen is not a stocked pantry, and a fast tap is not a full tank. Capacity tells you how much you could hold; inventory tells you what you actually have; withdrawal rate tells you how fast you can get at it.
| Fuel | Existing underground strategic storage | What the programme would add |
|---|---|---|
| Crude oil | 5.33 MT under Phase-I at Visakhapatnam, Mangaluru and Padur, holding about 3.37 MT; 6.5 MT more approved under Phase-II at Chandikhol and Padur | About 28 MT, to give roughly two months of demand cover |
| LPG | About 0.14 MT in the Visakhapatnam and Mangaluru caverns | About 4 MT — roughly a 30-fold increase — for about six weeks of demand |
| Natural gas / LNG | No operational underground storage; security rests on domestic output, imports, terminals, commercial inventories and pipelines | About 9 MT of LNG storage, for roughly two months of demand |
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Indian Strategic Petroleum Reserves Limited, the special purpose vehicle under the Ministry of Petroleum and Natural Gas that builds and manages India's strategic crude storage.
The volume of gas that must remain permanently in an underground storage reservoir to maintain the pressure needed for withdrawal.
A facility that receives LNG and converts it back to natural gas; its capacity is throughput, not strategic inventory.
A storage void solution-mined in a salt formation, valued for fast injection and withdrawal and frequent cycling rather than for bulk volume.
How quickly stored fuel can be taken out and delivered — often more decisive in a crisis than total stored volume.