India mulls national reserve policy to raise crude storage capacity to 100-150 days: Industry sources

India is considering a comprehensive national reserve policy aimed at significantly expanding the country's crude oil storage capacity and strengthening its energy security, sources told Business Today.

The Ministry of Petroleum and Natural Gas, in collaboration with state-run oil marketing companies (OMCs), is working on plans to scale up India's crude reserves and boost the country's stockholding capacity from the current level of about 74 days to between 100 and 150 days, the sources said.

According to the Oil Ministry, India's crude oil and petroleum product inventory currently stands at around 74 days.

As part of the proposed strategy, state-owned refiners Indian Oil Corporation (IOCL), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) are working towards expanding the country's oil storage and reserve infrastructure. The government and OMCs are also likely to scout for multiple locations across India for setting up additional crude reserves.

MUST READ: India seeks inspiration from China to tackle possible supply disruption in future

The move is aimed at enhancing India's ability to withstand supply disruptions and volatility in global energy markets. India, the world's third-largest importer and consumer of crude oil, relies on overseas supplies to meet more than 85% of its oil demand, making energy security a key policy priority.

Industry sources said the government is evaluating several locations for the creation of strategic and commercial storage facilities. Multiple sites are being considered to ensure geographical diversification and faster access to supplies during emergencies.

However, oil public sector undertakings have raised concerns over the higher costs associated with maintaining larger inventories and developing additional storage infrastructure, the sources said.

MUST READ: Record oil bill, rising electronics imports deepen India's trade deficit in May: Report

The proposed expansion comes amid heightened geopolitical tensions and growing uncertainty in global oil markets. Several countries have been increasing strategic petroleum reserves to protect themselves against supply shocks and price spikes.

If implemented, the move to increase reserve levels to 100-150 days would mark a significant jump from current levels and bring India closer to international best practices in energy security.

Discussions between the government and oil companies are ongoing, and the proposed national reserve policy is currently under consideration, industry sources added.

MUST READ: US-Iran deal done but brent crude prices could rise beyond $90 per barrel: Emkay