Page 46 - Policy Economic Report_Jan 25

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

14. STRATEGIC PETROLEUM RESERVES

o Hon’ble Prime Minister in February 2019 dedicated 5.33 MMT of strategic crude oil storage in SPR
Phase-I (1.5 MMT SPR facility in Mangalore and 2.5 MMT SPR facility in Padur and 1.3 MMT SPR
facility in Vishakhapatnam).

o Under Phase II of the petroleum reserve programme, Government has given approval in July 2021
for establishing two additional commercial-cum-strategic facilities with total storage capacity of
6.5 MMT (underground storages at Chandikhol (4 MMT) and Padur (2.5 MMT)) on PPP mode.

o Indian Strategic Petroleum Reserve Limited (ISPRL) had completed the Detailed Feasibility Report
(DFR) and geotechnical surveys for the project site in Chandikhol, District Jajpur, Odisha.
Environmental Impact Assessment (EIA) for the project has also been carried out by National
Environmental Engineering Research Institute (NEERI), Nagpur.

o In December 2022, Government of Odisha requested ISPRL to explore other sites in Odisha. In
view of anticipated delay in pursuing alternate land and need for carrying out feasibility studies
once again, Government of Odisha has been requested to allocate the same land at Chandikhol
for which ISPRL had earlier submitted application and completed feasibility studies.

15. HYDROCARBON PROJECTS & INVESTMENTS

o Oil and Gas sector is a key driver of economic growth and, therefore, infrastructure projects
provide a boost to the national economy and would contribute towards job creation, material
movement, etc. As of October 2024, there are 283 projects under implementation of the Oil &
Gas CPSEs costing ? 5 crore & above with a total anticipated cost of ? 5.70 lakh crore. The targeted
expenditure on these projects in FY 2024-25 is ? 79,264 crore against which Rs.37,138 crore is the
actual expenditure as of October, 2024. These projects, inter-alia, include Refinery projects, Bio
Refineries, E&P Projects, Marketing infrastructure projects, Pipelines, CGD projects,
drilling/survey activities, etc. Out of 283 projects, 89 are major projects costing ?500 crore &
above with an anticipated cost of ? 5.51 lakh crore. 50 projects have been completed in the
current FY 2024-25 with an anticipated cumulative cost of ? 4,519 crore.

Reducing Energy Dependence: Government has adopted a multi-pronged strategy to reduce the import
dependency on oil & gas which, inter alia, includes demand substitution by promoting the usage of natural
gas as fuel/feedstock across the country towards increasing the share of natural gas in the economy and
moving towards gas-based economy, promotion of renewable and alternate fuels like ethanol, second-
generation ethanol, compressed biogas and biodiesel, refinery process improvements, promoting energy
efficiency and conservation, efforts for increasing production of oil and natural gas through various
policies initiatives, etc. The Government has been promoting the blending of ethanol in petrol under the
Ethanol Blended Petrol (EBP) Programme. Blending of Petrol has reached approximately 14.6% during
Ethanol Supply Year (ESY) 2023-24. During the last ten years, EBP Programme helped in expeditious
payment of approx. Rs. 92,409 Crore to the farmers as on 30.09.2024. During the same period, EBP
programme has also resulted in approximate savings of more than Rs. 1,08,655 Crore of foreign exchange,
crude oil substitution of 185 lakh metric tonnes and net CO2 reduction of about 557 lakh metric tonnes. It
is anticipated that 20% ethanol blending in petrol is likely to result in payment of more than Rs. 35,000

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