Govt Spent Less Than Half Of Allocated Funds To Maintain Strategic Petroleum Reserves In FY25, FY26

The government spent less than half of the money allocated for maintaining the country’s strategic petroleum reserves in financial years 2024–25 and 2025–26.

While only 45 percent of the allocated budget could be spent on maintaining strategic reserves in FY25, just 47 percent has been spent in FY26 so far, according to a report by Moneycontrol. It cited a parliamentary committee report that was tabled in the House on March 17.

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However, spending in FY24 was better at about 75 percent of the budgetary allocation. The findings come amid the severe energy crisis faced by India and the world due to the closure of the Strait of Hormuz after the start of the United States-Israel-Iran war in the Gulf region.

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The government provides budgetary support to Indian Strategic Petroleum Reserve Ltd (ISPRL) for operating and maintaining strategic petroleum reserve facilities at Visakhapatnam, Mangaluru, and Padur. The three underground caverns have a total capacity of 5.33 million tonnes.

The oil ministry, however, attributed the shortfall to non-deployment of planned security personnel, lower electricity and manpower costs, delays in deputation of staff, lower crude operational activities, and delays in finalising the warehousing agreement with Mangalore Refinery and Petrochemicals Ltd, among others.

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The parliamentary committee advised the petroleum ministry and oil marketing companies to explore additional storage caverns, as the strategic reserves currently remain at just 64 percent of capacity.

It also recommended maintaining at least 90 days of crude reserves, which is the global standard. Currently, ISPRL has about 3.3 million tonnes of crude stock, which could last only 9–10 days as per the country’s daily crude consumption pattern.

State-run refiners also maintain inventories of around 65 days, bringing the country’s total storage capacity to 74–75 days. While the government has assured sufficient availability of fuel, energy prices in global markets have jumped over 50 percent since the start of the war.

The government is reverting to Russian and Iranian energy supplies after getting a 30-day moratorium from the United States.

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