The Strategic Petroleum Reserves (SPR) is a national emergency stockpile of crude oil, functioning as a concept and a scheme to ensure a country's energy security. The idea was first proposed in India in 1998 by the Atal Bihari Vajpayee administration, following the severe energy crisis during the 1991 Indian economic crisis when foreign exchange reserves could barely finance three weeks of imports. The SPR's purpose is to provide a buffer against sudden supply disruptions caused by geopolitical shocks or sharp price spikes in the global oil market.
The mechanism is managed by the Indian Strategic Petroleum Reserves Limited (ISPRL), a Special Purpose Vehicle (SPV) founded on June 16, 2004, under the administrative control of the Ministry of Petroleum and Natural Gas. India's Phase-I facilities, with a total capacity of 5.33 Million Metric Tonnes (MMT), are located in underground rock caverns at Visakhapatnam, Mangaluru, and Padur. This capacity is estimated to provide for about 9.5 days of India's crude oil requirement, which is in addition to the 64.5 days of commercial storage held by Oil Marketing Companies, bringing the total national capacity to 74 days.
The SPR connects to the International Energy Agency (IEA), of which India became an Associate Member in 2017. The IEA recommends that member nations maintain emergency reserves equivalent to a minimum of 90 days of net oil imports. Recently, the government approved the establishment of two additional facilities in Phase-II at Chandikhol (4 MMT) and Padur (2.5 MMT), with a total capacity of 6.5 MMT. A significant change is that these new reserves are being developed under a Public Private Partnership (PPP) model, replacing the previous fully government-funded model, and will operate on a "Strategic-cum-Commercial" basis, allowing foreign National Oil Companies like ADNOC to lease space.