Can India build a strategic fuel system? | Explained
India's energy security is vulnerable to disruptions, particularly from West Asia, due to insufficient strategic storage for crude oil, LNG, and LPG. The government is considering a decade-long program to significantly increase these reserves, aiming to provide nearly two months of crude and LNG demand and six weeks of LPG demand.
Why it matters
Developing a robust strategic fuel reserve system is crucial for India's energy independence and economic stability, protecting the nation from global supply shocks and geopolitical tensions. This initiative could significantly enhance national security and resilience.
West Asia-related disruptions have exposed a vulnerability in India’s energy-security system. India can import large quantities of crude oil, LNG and LPG, but its ability to store, transport and release these fuels during a prolonged disruption differs sharply by fuel. India already operates underground strategic crude-oil storage and two underground LPG caverns, but has no operating underground natural-gas storage facility.
Against this background, the government is considering a decade-long strategic-fuel programme that would add about 28 MT of crude-oil storage, 9 MT of LNG storage and 4 MT of LPG storage. Reuters reports that the proposed reserves are intended to provide nearly two months of crude and LNG demand and about six weeks of LPG demand. The programme remains under consideration and should therefore be treated as a proposed target, not committed capacity.
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