Centre plans strategic petroleum reserves in Rajasthan, Madhya Pradesh

New Delhi: Amid mounting concerns over energy security, the Centre is moving to develop two new strategic petroleum reserves (SPRs) at Bikaner in Rajasthan and Bina in Madhya Pradesh, as the conflict in West Asia and the risk of supply disruptions heighten India’s vulnerability to crude-oil shocks.

Feasibility studies for the proposed Bikaner caverns have been completed and are being finalized, while the pre-feasibility study for the Bina caverns has concluded and a detailed feasibility report (DFR) is set to be initiated, the ministry of petroleum and natural gas told a parliamentary standing committee.

The stakes are high for an economy that imports about 90% of its oil requirement. A $1 increase in the price of a barrel of oil, sustained for a year, can raise India’s annual import bill by ₹18,000 crore, with implications for the external sector, inflation and growth.

India’s crude oil import bill surged nearly 60% to $49.8 billion in the June quarter (Q1FY27), even as the volume of oil imported fell to about 60 million tonnes from 62.6 million tonnes a year earlier, government data showed. The world’s third-largest oil importer had spent about $31 billion on crude in the corresponding period of the previous fiscal.

“The Government also continuously evaluates new sites and expansion opportunities for augmenting crude oil and petroleum product storage capacity, based on technical, commercial, and strategic considerations. Two more new SPR projects are under consideration, at Bikaner and Bina. Feasibility studies for the Bikaner caverns have been completed and under finalization, while the pre-feasibility study for the Bina caverns has also concluded and the DFR to be initiated,” the ministry said, as quoted by the parliamentary panel’s report submitted on Wednesday.

Mint earlier reported that the government had tasked Engineers India Ltd (EIL) with preparing detailed feasibility reports for proposed strategic reserves amid tensions in West Asia.

Building the buffer

India currently has strategic crude storage capacity of 5.3 million tonnes across Vishakhapatnam in Andhra Pradesh and Mangaluru and Padur in Karnataka. Prime Minister Narendra Modi told the Lok Sabha in March that India was working to build an additional 6.5 million tonnes of crude reserves.

The Union cabinet had approved the 6.5-million-tonne expansion in 2021, comprising 4 million tonnes at Chandikhol in Odisha and 2.5 million tonnes at Padur.

Progress on both projects is still underway. The ministry told the standing committee that land acquisition for 400 acres at Chandikhol has been completed. The request for proposal (RFP) for the planned 4-million-tonne reserve is under review and will be floated after finalization.

For Padur-II, the ministry said the concessionaire agreement between Indian Strategic Petroleum Reserve Ltd (ISPRL) and the selected bidder, Megha Engineering and Infrastructures Ltd (MEIL), was signed in October last year and financial closure is in progress.

In September 2025, Hyderabad-based MEIL was selected to develop India’s first strategic reserve under a public-private partnership (PPP) model at Padur.

The parliamentary committee, headed by Lok Sabha member Sunil Dattatrey Tatkare, has urged the government to move towards maintaining the global standard of 90 days of crude-oil storage.

“Furthermore, in light of the global energy crisis arising from current geopolitical situations, the Committee strongly urge the Ministry to make every possible effort to achieve the global standard of maintaining 90 days of crude oil storage within the country for strengthening the nation’s energy security and safeguarding the economy against potential supply shocks and external uncertainties,” it said.

The International Energy Agency mandates 90 days of stocks for permanent membership. Taking into account stocks in pipelines, refineries, strategic reserves and on vessels, India usually maintains stocks for about 77 days.

In March, the Centre told Parliament that of the 5.33 million tonnes of strategic crude-oil storage capacity across the three existing locations, about 3.37 million tonnes was available as a buffer against short-term supply shocks, around 64% of total capacity.

The committee previously flagged concerns over funding for the operation and maintenance of ISPRL’s facilities. In its March report, it noted a “sharp decline” in ISPRL’s operations and maintenance budget estimate, from ₹220.04 crore to a revised estimate and actual spending of ₹100 crore each in FY25.