40-day oil buffer plan enters action phase with five new SPR projects

India is moving ahead with a major expansion of its strategic petroleum reserve (SPR) network, with five projects planned across Chandikhol in Odisha, Bina in Madhya Pradesh, Bikaner in Rajasthan, and Mangaluru and Padur in Karnataka, according to people familiar with the matter.

 

The expansion could significantly strengthen India’s energy security, potentially taking its strategic crude oil storage cover to as much as 40 days of consumption from the current nine and a half days, depending on oil demand levels when the projects are completed.

 

As part of the plan, the government is targeting the award of the construction contract for the Chandikhol SPR by the end of the current financial year (FY27). It is also preparing to begin detailed feasibility reports (DFRs) for the proposed reserves at Bina and Bikaner after securing the required approvals, the people said.

 

The Chandikhol facility is expected to have a storage capacity of about 4 million tonnes (mt), while the proposed reserves at Bina and Bikaner are planned at 5 mt and 5.625 mt, respectively. If developed, the Bikaner SPR would become India’s first strategic oil storage facility based on salt cavern technology.

 

“The government is committed to expanding the capacity of oil reserves in the country. Although plans to add more storage have been under discussion for some time, the projects are now moving forward at a faster pace,” said a person familiar with the matter. Queries sent to the Ministry of Petroleum and Natural Gas (MoPNG) remained unanswered at the time of going to press. 

 

India currently operates three strategic oil storage facilities located at Mangaluru (1.5 mt capacity) and Padur (2.5 mt) in Karnataka, and Visakhapatnam (1.33 mt) in Andhra Pradesh. These rock cavern-based facilities are owned and operated by Indian Strategic Petroleum Reserves Limited (ISPRL), a special-purpose company established by the government to maintain emergency crude oil stocks during wars, geopolitical disruptions and major supply shocks.

 

Meanwhile, the government has asked state-run Oil and Natural Gas Corporation (ONGC) to develop a new 1.75 mt underground strategic petroleum reserve at Mangaluru. The project would mark the first strategic petroleum reserve in India to be developed by a state-owned oil company.

 

The expansion of the Padur facility by an additional 2.5 mt is already under execution under a public-private partnership (PPP) model, with Megha Engineering & Infrastructures securing the engineering, procurement and construction (EPC) contract for the project last year.

 

The West Asia crisis has intensified concerns over India’s ability to withstand global oil supply disruptions. While the International Energy Agency (IEA) recommends countries maintain emergency oil stocks equivalent to at least 90 days of net imports, India currently has storage capacity covering only about 9.5 days. By comparison, other Asian economies have built significantly larger buffers, with China holding stocks equivalent to roughly 90 days and Japan maintaining reserves of around 200 days.

 

India has consistently lagged on spending for strategic petroleum reserves. Budget documents show that in 2025-26, the government spent only about one-sixth of the allocation earmarked for creating strategic crude oil storage infrastructure. The government had allocated ₹5,876 crore in the FY26 Budget for strategic oil reserves, but only ₹1,039 crore was utilised during the year (based on revised estimates). In the FY27 Budget, the allocation for the same has been reduced sharply to ₹200 crore.