{"id":121411,"date":"2026-08-28T10:54:36","date_gmt":"2026-08-28T05:24:36","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=121411"},"modified":"2026-08-28T10:54:36","modified_gmt":"2026-08-28T05:24:36","slug":"strategic-fuel-system-explained","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/strategic-fuel-system-explained\/","title":{"rendered":"India\u2019s Capacity To Build a Strategic Fuel System &#8211; Explained"},"content":{"rendered":"<h2 style=\"text-align: justify;\"><strong>Strategic Fuel System Latest News<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Disruptions linked to West Asia have exposed vulnerabilities in India&#8217;s energy security, prompting the government to consider a decade-long strategic fuel programme to significantly expand crude, LNG and LPG storage.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>The Core Vulnerability<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India can import large quantities of crude oil, LNG and LPG. What differs sharply by fuel is its ability to store, transport and release these fuels during a prolonged disruption.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India already operates underground strategic crude-oil storage and two underground LPG caverns. It has no operating underground natural-gas storage facility at all.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Against this background, the <\/span><b>government is considering a programme that would add roughly 28 MT of crude-oil storage, 9 MT of LNG storage and 4 MT of LPG storage over a decade<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The reserves are intended to provide nearly two months of crude and LNG demand and about six weeks of LPG demand.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>India\u2019s Present Condition<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li><b>Crude Oil<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">Crude is the most mature component. Phase-I of the Strategic Petroleum Reserve provides 5.33 MT of underground capacity across <\/span><b>Visakhapatnam<\/b><span style=\"font-weight: 400;\">, <\/span><b>Mangaluru<\/b><span style=\"font-weight: 400;\"> and <\/span><b>Padur<\/b><span style=\"font-weight: 400;\">, with actual storage of about 3.37 MT, roughly 63-64% utilisation.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">A further 6.5 MT has been approved under Phase-II at <\/span><b>Chandikhol<\/b><span style=\"font-weight: 400;\"> and <\/span><b>Padur<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>LPG<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">The underground footprint here is far smaller. The Visakhapatnam and Mangaluru caverns together provide about 0.14 MT of capacity.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">A proposed 4 MT strategic reserve would represent roughly a 30-fold increase in underground LPG capacity.<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Natural Gas<\/b>\n<ul>\n<li><span style=\"font-weight: 400;\">This is the largest gap. <\/span><b>India has no operational underground gas-storage facility<\/b><span style=\"font-weight: 400;\">. Its gas-security system instead depends on domestic production, LNG imports, import terminals, commercial inventories and pipelines.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Capacity Is Not the Same as Inventory<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">An important distinction runs through this debate. A facility has a physical capacity, but the fuel it actually holds can vary. Not all inventory is immediately accessible either.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">During a crisis, the critical measure is therefore not simply how many tonnes can be stored, but how much fuel is available and at what withdrawal rate it can reach consumers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">LNG is particularly prone to confusion because India already has substantial import and regasification infrastructure.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A regasification terminal can receive LNG and convert it into natural gas, but its regasification capacity does not constitute strategic inventory.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">LNG is stored as a cryogenic liquid at around -162\u00b0C, requiring specialised insulated tanks and boil-off gas management. Underground gas storage works differently: LNG is first regasified, and the resulting natural gas is injected into a depleted reservoir or cavern.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Building Underground Storage Is Not Simple<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India could eventually combine surface LNG tanks with underground natural-gas storage.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A separate Petroleum Ministry proposal would require LNG import terminals to maintain storage capacity 10% above normal operating needs, with the surplus available to the government during supply or price disruptions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">For longer-duration needs, depleted oil and gas reservoirs, 74% of global working gas volume, could offer much larger storage. Salt caverns, by contrast, allow faster injection\/withdrawal and more frequent cycling.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">However, a depleted field isn&#8217;t automatically storage-ready: reservoir characteristics, cap-rock integrity, pressure behaviour, existing wells, cushion-gas needs and pipeline connectivity must all be assessed.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">India&#8217;s sedimentary basins (Krishna, Godavari, Cambay, Mumbai Offshore, Rajasthan) show potential, but converting geological promise into usable storage requires subsurface study, engineering, construction, testing, filling and pipeline integration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Salt caverns face similar scrutiny, Rajasthan&#8217;s salt formations have been studied, but suitability hinges on depth, thickness, purity, geometry, groundwater and mechanical properties.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Storage as an Infrastructure System<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The US Strategic Petroleum Reserve shows the scale salt caverns can reach: 714 million barrels of authorised capacity across 60 caverns, functioning as an integrated network of caverns, pipelines, marine terminals and refineries.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Storage is thus fundamentally an infrastructure system, not just underground space.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">LPG illustrates the scaling challenge: a proposed 4 MT reserve would need extensive new caverns plus import terminals, pipelines, pumping systems and bottling infrastructure.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Mangaluru cavern highlights the complexity, geological and hydrogeological investigation, rock-mechanics analysis, and groundwater management alongside active surface facilities.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>Shipping and Pipelines<\/strong><\/h2>\n<ul style=\"text-align: justify;\">\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Since energy security relies heavily on maritime logistics, including vulnerable chokepoints like the <\/span><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/strait-of-hormuz\/\" target=\"_blank\"><span style=\"font-weight: 400;\">Strait of Hormuz<\/span><\/a><span style=\"font-weight: 400;\">, India is diversifying both import sources and shipping capacity.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">State-run refiners and the Shipping Corporation of India plan to invest $1.5-2 billion in a joint venture for 59 ships, cutting reliance on foreign vessels.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Pipelines link storage to inland consumers. PNGRB has authorised about 1,800 km of new LPG pipelines across six states (~$0.7 billion investment), improving deliverability and cutting road dependence, but not adding strategic storage itself.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">This principle spans fuels: underground storage only helps if it can inject\/withdraw from the gas grid at the needed rate; LNG tanks need regasification and downstream pipelines; LPG caverns need bottling and distribution links.<\/span><\/li>\n<\/ul>\n<h2 style=\"text-align: justify;\"><strong>The Financing Question<\/strong><\/h2>\n<ul>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The reported <\/span><b>$42 billion programme<\/b><span style=\"font-weight: 400;\">, unconfirmed by the government, combines infrastructure capex with the cost of buying and maintaining strategic inventories. Over half may go to storage infrastructure, the rest to purchasing and filling reserves. The government has denied reports of a funding cess.<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The financial commitment continues beyond construction: billions in fuel must be purchased, financed and maintained, and crisis-released stocks would need replenishing, potentially at higher commodity and freight prices.<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Policy must therefore define who owns and finances the inventory, minimum stock obligations, emergency-release authority, and who bears replenishment and price risk.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A commercial-cum-strategic model could ease the public burden, provided commercially used capacity stays available during emergencies.<\/span><\/li>\n<\/ul>\n<p><strong>Source: <a href=\"https:\/\/www.pressreader.com\/india\/the-hindu-bangalore-9ww1\/20260828\/282480010650970\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India&#8217;s proposed strategic fuel system would expand crude, LNG and LPG storage, but energy security depends equally on shipping, pipelines and governance.<\/p>\n","protected":false},"author":21,"featured_media":121416,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[60,9841,22,59],"class_list":["post-121411","post","type-post","status-publish","format-standard","has-post-thumbnail","category-upsc-mains-current-affairs","tag-mains-articles","tag-strategic-fuel-system","tag-upsc-current-affairs","tag-upsc-mains-current-affairs-tag","no-featured-image-padding"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/121411","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=121411"}],"version-history":[{"count":2,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/121411\/revisions"}],"predecessor-version":[{"id":121417,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/121411\/revisions\/121417"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/121416"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=121411"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=121411"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=121411"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}