India to provide $647 million to support strategic reserve oil purchases in 2025-26

Indian Strategic Petroleum Reserve Ltd which manages federal oil inventories, operates 3 SPRs in southern India with a combined capacity of about 5 million tons

India will provide 55.97 billion rupees ($646.78 million) support for purchase of oil for the country's strategic petroleum reserves (SPRs), the budget document showed on Saturday.

Silos at an oil refinery operated by Bharat Petroleum Corp. Ltd., in Mumbai, India, on Tuesday, April 4, 2023. A surprise cut in oil production from OPEC+ is now setting the stage for other producers to vie for markets in Asia. (Dhiraj Singh/Bloomberg)

Indian Strategic Petroleum Reserve Ltd (ISPRL), which manages federal oil inventories, operates three SPRs in southern India with a combined capacity of about 5 million tons.

Part of that capacity is used for commercial operations by companies including Abu Dhabi National Oil Co (ADNOC).

The budget proposals also include an allocation of about 1.8 billion rupees for operation and maintenance of the SPRs and about 3.35 billion rupees for purchase of land and construction of new caverns.

India, the world's third-biggest oil importer and consumer, imports over 80% of its oil needs and is raising its SPR capacity to protect against any global supply disruption.

ISPRL has sought interest from private companies to build and operate a 2.5 million metric ton store for petroleum reserves at Padur in the southern state of Karnataka.

India is also planning to build a 4 million ton SPR at Chandikhol in the eastern state of Odisha.