Indian Strategic Petroleum Reserve

 Indian Strategic Petroleum Reserve

What is Important?
UPSC perspective:
Prelims: Indian Strategic Petroleum Reserve
Mains: SPR programme & Importance

Why in News?

Last week, the government approved the construction of two more strategic petroleum reserves in the country. These will come up at Chandikhol in Odisha and Padur in Karnataka and will have an aggregate capacity of 6.5 million tonnes.

About ISPR

*A strategic petroleum reserve is like a piggy bank. Just that it is used to store crude oil instead of coins and currency notes.
*The Indian Strategic Petroleum Reserve (ISPR) is an emergency fuel store of total 5.33 MMT (million metric tons) or 36.92 MMbbl of strategic crude oil enough to provide 10 days of consumption, which are maintained by the Indian Strategic Petroleum Reserves Limited.
*Strategic crude oil storages are at 3 underground locations in Mangalore, Visakhapatnam and Padur(near Udupi).
All these are located on the east and west coasts of India which are readily accessible to the refineries. These strategic storages are in addition to the existing storages of crude oil and petroleum products with the oil companies and serve in response to external supply disruptions.
*In the 2017-18 budget speech by the Indian finance minister Arun Jaitley, it was announced that two more such caverns will be set up Chandikhole in Jajpur district of Odisha and Bikaner in Rajasthan as part of the second phase.
*This will take the strategic reserve capacity to 15.33 million tons. .
*Apart from this,India is planning to expand more strategic crude oil facilities in second phase at Rajkot in Gujarat and Padur in Udupi district of Karnataka.

Why is it important?

*India is the world's third biggest energy customer after the US and China.
*The inconvenience is, we produce very little oil of our own and aredependent on imports for more than 80 percent of our needs.
*The lump of this is from West Asia which is frequently in the middle some geo-political go head to head or the other. There's no idiom when some significant provider would toy with the idea arm-contorting India.
*Added to this, there’s always the risk of supply disruption from natural disasters, war or other calamities.
*In short, our energy demand-supply dynamic is delicately poised. Strategic petroleum reserves add much-needed heft to the country’s energy security, giving us crucial time and breathing space if push comes to shove.
*The global practice is to maintain strategic reserves of at least 90 days of oil imports. On that India has a long way to go, but then, as wise Lao Tzu said, the journey of a thousand miles begins with a single step.
*Petroleum reserves are also a good idea because crude oil prices are extremely fickle, and defy punditry.
*Few anticipated its crash from triple digits in 2014 to less than $30 a barrel in 2016. Fewer anticipated the near-doubling of prices since then to about $80 a barrel now.

Indian Strategic Petroleum Reserve  Indian Strategic Petroleum Reserve Reviewed by The Hindu Current Affairs on October 16, 2018 Rating: 5

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