New Delhi9 minutes ago
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Taking a lesson from the oil crisis during the US-Iran war, the central government has decided to create a new emergency oil reserve. This Emergency Petroleum Reserve (SPR) will be created by the government oil company Oil and Natural Gas Corporation (ONGC).
According to the report of Economic Times (ET), this entire project is estimated to cost around ₹ 15,000 crore. This new emergency oil reservoir will be built in an underground cave in Mangaluru, Karnataka. It can hold 1.75 million metric tons (MMT) i.e. 17.5 lakh metric tons of oil.
Currently India’s total strategic crude storage capacity is 53.3 lakh metric tonnes. After the completion of the project, the country’s oil storage capacity for emergency situations will increase by about one-third (33%).
₹5000 crore spent in making and ₹10,000 crore spent in filling oil
The expenditure of this project has been divided into two parts. According to reports, ONGC will spend around ₹5,000 crore on the construction of the underground cave. After this, depending on the current market prices and exchange rates, ₹10,000 crore may be required to fill crude oil in this facility.
At present it is not clear how ONGC will recover this huge investment. It is also yet to be decided whether this facility will serve only as an emergency reserve or it will also include commercial activities to increase revenue.
A big change from the old tradition, earlier the government used to provide the entire fund.
ONGC’s spending on such a large scale is a huge change in the history of building oil reserves in India. Till now all the strategic petroleum reserve projects of the country were completely funded by the government.
It is managed by a special government organization ‘Indian Strategic Petroleum Reserves Limited’ (ISPRL).
India’s reserves are much smaller than China and America
India consumes about 5 million barrels of crude oil every day, compared to which our current strategic reserves (5.33 million tonnes or 39 million barrels) are very small.
According to data from the US Energy Information Administration (EIA) at the end of 2025, India had strategic crude reserves of only 21 million (21 million) barrels.
In comparison, China has huge reserves of 1397 million barrels, America has 413 million barrels and Japan has 263 million barrels.
Knowledge Box: What is Petroleum Reserve?
Petroleum reserve means the stock of crude oil or petrol-diesel, which a country keeps for future supply. Just like you store grains at home, similarly a country stores oil. There are broadly two types of petroleum reserves in India…
1. Strategic Petroleum Reserve
Think of it like a petroleum safe. It is kept by the government for emergency. It is not used on normal days. It is used only during war, oil crisis or supply stoppage. India has 3 strategic petroleum reserves in Mangalore, Padur and Visakhapatnam. Where oil is kept in large cavernous tanks under the ground.
2. Commercial Petroleum Reserve
Oil companies like Indian Oil keep commercial stock with them, so that the supply remains at the petrol pumps. These are for everyday needs. These are mostly kept in large tanks above ground.
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