New Delhi: A parliamentary committee on petroleum and natural gas has urged the Central government to move faster on strategic petroleum reserves, saying India should make “every possible effort” to reach the global benchmark of 90 days of crude oil storage to strengthen energy security against supply shocks. The panel has also flagged the delays in the execution of planned strategic reserves under the phase-II expansion and the persistent underspending by the Ministry of Petroleum and Natural Gas on strategic reserves.
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The recommendation comes at a time when West Asia tensions have underlined the value of deeper reserve buffers, even as India currently has 74 days of strategic reserves for crude oil.
The committee’s concern is not just the size of the reserve, but the pace at which expansion is moving. In the report, it repeatedly points to slow execution, repeated budget cuts and unresolved contractual and land issues that are holding back strategic petroleum reserve projects.
On the operations and maintenance side of the existing Strategic Petroleum Reserve facilities at Visakhapatnam, Mangaluru and Padur, the committee noted a sharp gap between Budget Estimates and actual spending in the last three financial years. Actual expenditure stood at 75 percent of Budget Estimate (BE) in FY 2023-24, 45 percent in FY 2024-25 and 47 percent in FY 2025-26, which the committee said needs closer scrutiny.
The ministry told the committee that the shortfall was linked to “non-deployment of planned security personnel, lower electricity and manpower costs, delays in deputation of staff, lower crude oil operational activities and delays in finalising the warehousing agreement with Mangalore Refinery and Petrochemicals Limited.”
The committee accepted that some reductions may reflect operational efficiencies, but said recurring downward revisions from BE to RE point to shortcomings in realistic planning. It urged the ministry to make “a more realistic assessment of O&M requirements” and to expedite pending operational arrangements and contractual agreements so the infrastructure is used efficiently.
One of the clearest examples of delay flagged by the committee is the additional cavern project at Mangalore. It noted that ISPRL signed an MoU with Mangalore Special Economic Zone Limited on March 17, 2023 for acquisition of 154.90 acres of land, and that ISPRL later chose the option of notification of 66.74 acres. That decision was communicated on June 18, 2025.
The committee said Rs 215.59 crore has already been paid against a total cost of Rs 226.94 crore, but the signing of the deed is still pending because confirmation on notification of the 66.74 acres is awaited from MSEZL. It urged the ministry to pursue the matter with MSEZL and other authorities “on priority,” complete the remaining formalities early and set a clear timeline so development of the additional cavern storage can begin.
The committee was equally critical of the execution track for Phase-II strategic reserves of Indian Strategic Petroleum Reserves Limited (ISPRL). It said the government approved two additional reserves on July 8, 2021 with a combined capacity of 6.5 MMT, including a 4 MMT facility at Chandikhol in Odisha and a 2.5 MMT reserve at Padur in Karnataka. While land acquisition at Chandikhol is at an advanced stage, financial closure is still in progress to meet the conditions precedent under the Padur-II concession agreement.
The report highlights repeated cuts in budget allocation for the scheme. For 2023-24, the BE of Rs 508 crore was reduced to Rs 40 crore under Revised Estimates (RE), with no expenditure incurred. For 2024-25, the BE of Rs 408 crore was cut to Rs 30 crore, and spending came to Rs 17.25 crore. For 2025-26, the BE of Rs 100 crore was scaled down to Rs 20 crore, while expenditure stood at Rs 14.54 crore. For 2026-27, only Rs 20 crore has been allocated.
The committee said such scaling down should be avoided if projects are to move quickly. It said delays in finalising the bidding process and subsequent stages under the PPP framework led to the withdrawal of funds projected for milestone payments at the BE stage, particularly for Padur-II. It urged the ministry to make “realistic and need-based budgeting” based on actual land acquisition progress, project readiness and contractual milestones.
Beyond the project-specific criticism, the committee framed the issue as one of national energy security. It said that in projects of strategic importance, allocated funds should be fully utilised and the ministry should ensure “better planning, timely execution and optimal utilisation of funds” so the objectives of the reserve programme are achieved within the stipulated timeline.
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The report’s strongest conclusion is its call to raise India’s crude oil reserve strength to the global standard of 90 days. In light of the “global energy crisis arising from current geopolitical situations,” the committee urged the ministry to make every possible effort to reach that level “for strengthening the nation’s energy security and safeguarding the economy against potential supply shocks and external uncertainties.”