Energy security in focus: What India’s crude oil, LPG and LNG strategic reserves strategy should look like

India’s energy security has been in sharp focus since the start of the US-Iran conflict. The need for robust strategic reserves to counter impact of global supply disruptions cannot be overstated. India’s dedicated Strategic Petroleum Reserves capacity stands at 5.33 MMT, spread across Visakhapatnam, Mangaluru, and Padur, which is equivalent to roughly 9.5 days of crude oil consumption as per PIB data released in March 2026. The government has approved the Phase II expansion of 6.5 MMT at Chandikhol (Odisha) and Padur (Karnataka) under the PPP model. Once completed, the total strategic petroleum reserves capacity will increase to 11.88 MMT, enabling India to move significantly closer to the 90-day reserve target.

India is working with the UAE for 30 million barrels of crude of storage capacity.But, importantly, experts point out that India’s strategic petroleum reserve policy should evolve into a broader energy security strategy that covers crude oil, LPG, and LNG.

Pranav Master, Director, Crisil Intelligence advocates a three-tier strategic reserves policy: large physical reserves for crude oil, distributed operational-security reserves for LPG, and a mainly contractual or virtual reserve model for LNG, because LNG is expensive and technically difficult to store for long periods.What should India’s immediate and long-term energy security plans look like? We decode:

Focus on strategic petroleum reserves

Experts advocate a proactive approach to maintaining strategic reserves, with long-term to medium and immediate objectives in mind.Sourav Mitra, Partner – Oil & Gas, Grant Thornton Bharat says that for crude oil, India should target a minimum of around 30 days of dedicated strategic reserves managed by Indian Strategic Petroleum Reserve Limited (ISPRL).This should be complemented by a mandatory 60 days of commercial refiner operational stock. This would bring the total national coverage to around 90 days which in line with standards set by agencies like International Energy Agency (IEA), Mitra tells TOI.

Sumit Ritolia, Lead analyst, Modelling and Refining at Kpler also advocated a 75-100 days of total inventory cover, in line with international best practices. “Given the country’s growing refining capacity and import dependence, expanding strategic crude storage should remain the top priority,” he says.According to Pranav Master, the crude reserve policy should incorporate the following key elements:

LPG stocks

LPG fuel availability impacts more than 330 million households and hence a disruption in LPG supply quickly becomes a household welfare issue and can create social stress. India imports around 60% of its LPG requirement, and a very large share of those imports is linked to the Gulf region and the Strait of Hormuz.

“India currently holds an insignificant amount of strategic reserve. The policy must mandate a dedicated 25-40-day strategic reserve via salt-caverns and an additional 30 days of commercial buffer via import terminals, refineries, bottling plants, etc. to prevent panic buying and insulate public welfare,” Grant Thornton Bharat’s Mitra says.As Pranav Master notes: The government has already indicated a target of around 30 days of LPG storage in line with what India should target. The Crisil expert believes that the strategic reserves policy design of LPG should be different from crude oil. The focus should be on distributed resilience, not only large- centralized storage.He says that the LPG reserves policy should be framed by considering the following aspects:-

LNG strategy

Experts agree that in the case of Liquified Natural Gas (LNG), storage is not just challenging but also very expensive.Sumit Ritolia of Kpler is of the view that for LNG, the strategy needs to differ from crude because large-scale LNG storage is significantly more expensive and technically challenging.“However, with 95-100% import dependence, India should still target 40-50 days of physical LNG inventory, supplemented by diversified long-term supply contracts, destination-flexible cargoes, floating storage where economical, and imports from multiple suppliers such as Qatar, the US, Australia, Oman, and Russia. Energy security for LNG should rely on both physical storage and contractual flexibility,” he tells TOI.Pranav Master also says that for LNG, India should not try to build reserves equivalent to crude oil. “LNG is cryogenic, expensive to store, and subject to boil-off losses. Long-duration LNG stockpiling is not economically efficient. The right architecture should be the combination of regas terminal tankage buffer, underground storage and flexible LNG contracts with flexibility to adjust volumes, delivery timings or cargo destinations,” he tells TOI.Japan, one of the world’s largest LNG importers, has LNG storage infrastructure equivalent to around 36 days of gas demand, complemented by its recently introduced Strategic Buffer LNG (SBL) mechanism, which enables additional LNG available for priority sector during periods of supply disruption. “India is moving in a similar direction through the Ministry’s draft proposal requiring new LNG terminals to maintain around 10% additional storage capacity, which is a positive step towards improving supply resilience without significantly increasing costs,” he adds.

What should be the strategy right now?

But even as expansion of strategic reserves happens, immediate needs and vulnerabilities are equally important. Most of the strategic petroleum reserve projects have long gestation period, and in the interim India’s diversified energy procurement strategy will be key to mitigating risks.Sourav Mitra notes that given the time required for feasibility studies, land acquisition, environmental and statutory clearances, cavern leaching, construction of surface facilities, pipeline connectivity and inventory build-up, the complete strategic reserve system across crude oil, LPG and natural gas is estimated to be fully realised around 2033–2036.“In the interim, India should focus on rapidly expanding physical inventories rather than waiting for new caverns to be commissioned,” he says advocating the following:

“This approach would materially strengthen energy security over the next 3–5 years while the longer-gestation strategic reserve projects are being developed,” he tells TOI.

“The ongoing expansion of India’s strategic crude reserves, including the Phase-II SPR projects, is likely to take 4-7 years to become fully operational after financial closure and construction. Similarly, new LPG caverns and LNG storage infrastructure typically require 4-7 years, meaning a meaningful increase in strategic storage capacity is unlikely in the near term,” says Sumit Ritolia.“Until these projects are completed, India should adopt an interim strategy focused on resilience. This includes maintaining higher commercial inventories during periods of geopolitical uncertainty, continuing to diversify crude and LNG import sources, utilizing leased storage where commercially viable, strengthening long-term supply agreements, and opportunistically building inventories during periods of lower international prices. Together, these measures would enhance India’s ability to withstand prolonged supply disruptions while permanent strategic storage capacity is expanded,” he adds.Pranav Master of Crisil concludes that energy security should not be measured solely by the number of reserve days available. It should be assessed by the country’s overall ability to respond rapidly and efficiently to supply disruptions. “A balanced approach that combines strategic petroleum reserves, adequate commercial stocks, diversified sourcing, and robust logistics and infrastructure will provide a more resilient and cost-effective energy security framework while additional strategic storage capacity is being developed and commissioned,” he says.