Diversifying sources and building storage are necessary but not sufficient for India's energy security. Discuss.

Energy security means a steady supply of energy at a price people can afford. India imports about 85% of its crude [1], so spreading purchases across suppliers and storing oil are its first defences. September 2026 showed their limits. Crude import volume rose only 7%, but the import bill rose 47% to $15.4 billion as conflict returned in West Asia [2].

Why diversification and storage are necessary

• Buffer against supply shocks: the Strategic Petroleum Reserves (SPR) at Visakhapatnam, Mangaluru and Padur hold 5.33 MMT. Phase II at Chandikhol and Padur is being built under a PPP model [3].
• Less exposure to one region: a Parliamentary Standing Committee noted that most hydrocarbon imports come from the conflict-prone Middle East. It urged newer, shorter routes and a pipeline share above the current ~49% [4].

Why they are not sufficient

• Price risk remains: diversifying changes who sells the oil, not the world price. The Indian crude basket rose from $82 a barrel in July to $116.1 in September 2026 [5].
• Effect on the wider economy: every $10 a barrel rise adds about $12.5 billion to the oil deficit and about 0.49 percentage points to headline inflation [6]. RBI calls energy prices an "upside risk" to the current account deficit [5].
• Thin storage: the SPR covers only ~9.5 days of demand, against a 90-day global standard [1]. SPR capital spending for 2025-26 was cut from ₹5,876 crore to ₹870 crore [1].
• More spot buying: spot purchases at the day's price rose from 27.6% to 35.1% of crude imports between 2017-18 and 2022-23. This passes price spikes straight into the bill [4].

What completes energy security

• Cut demand: set up an expert group to reduce fossil-fuel demand, and push green hydrogen, EVs and biofuels [4].
• Fill reserves when oil is cheap: "ensure that caverns are filled with oil" [1]. Budget money that is actually spent when prices fall.
• Smarter buying: audit spot versus term contracts and lock in more volume on term contracts [4].
• Shock-sharing plan: decide in advance how excise cuts, oil company losses and pump prices will share the cost.

In short, diversification and storage protect supply, but not price or the wider economy. A full strategy adds demand reduction, fiscal planning and smarter buying. That moves India from crisis management towards lasting energy security, in line with SDG 7 (affordable and clean energy).