The government plans to offer viability gap funding (VGF) to attract bidders for the second phase of Indian Strategic Petroleum Reserves, which will add 12 days of crude oil storage, two government officials aware of the matter said. The move is part of India’s efforts to enhance energy security.
The second phase will require an investment of $1.6 billion under the public-private partnership (PPP) mode. The Union cabinet’s nod for the terms to be offered under the VGF route to bidders will be sought. The proposal is under discussion.
This comes against the backdrop of tensions between China and India, the world’s second- and third-largest crude oil importers, respectively. The move assumes significance as India’s energy needs are primarily met through imports, which raises supply risks in times of war or natural exigencies.
