India Plans Phase-2 Strategic Petroleum Reserves Under PPP at Rs 14,527 Crore
India is planning to build two additional commercial-cum-strategic petroleum reserve (SPR) facilities under a public-private partnership (PPP) model at an estimated project cost of ₹14,527 crore, as part of strengthening its energy security. Viability gap funding (VGF) — government assistance that makes essential but commercially marginal infrastructure viable — has been capped at 60% of the total project cost, Minister of State for Petroleum Suresh Gopi said in reply to a query in the Lok Sabha. The Phase-II facilities are envisaged on the PPP model, combining commercial storage with strategic reserves.
Key Facts & Details
8 points- 1India plans two additional commercial-cum-strategic petroleum reserve facilities.
- 2They will be built under a PPP model at an estimated ₹14,527 crore.
- 3Viability gap funding (VGF) is capped at 60% of total project cost.
- 4MoS Petroleum Suresh Gopi gave the details in the Lok Sabha.
- 5The aim is strengthening India's energy security.
Deep Dive
- +Strategic petroleum reserves are emergency crude stockpiles for supply disruptions.
- +A commercial-cum-strategic facility lets private players use part of the capacity commercially.
- +VGF is capital support that makes socially useful but low-return projects bankable.
Exam Focus
What is the viability gap funding cap for India's Phase-II strategic petroleum reserve projects?
Exam Relevance & Angle
Strategic petroleum reserves, PPP models and viability gap funding are all recurring economy and energy-security exam concepts, and the outlay and VGF cap are precise figures.
Target Exams
Background & Context
A strategic petroleum reserve (SPR) is an emergency stockpile of crude oil a country holds to cushion against supply disruptions or price shocks — critical for India, which imports most of its crude. Building them is expensive and earns little direct return, so the government uses a public-private partnership with viability gap funding (VGF) — a capital grant that bridges the gap between project cost and commercial viability — and allows part of the storage to be used commercially to attract private partners.
Test Yourself
1 / 2Viability gap funding for India's Phase-II strategic petroleum reserve projects has been capped at what share of project cost?
Source
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