Systemic failures have led to inadequate oil reserves

The ongoing war in Iran has once again highlighted the grave systemic inadequacies. In 2018, it was decided that a 4-million tonne (mt) strategic oil reserve would be developed at an estimated cost of Rs 8,743 crore in the Dankari hill region near Chandikhol in Jajpur district, Odisha. The urgency of the project could scarcely be overemphasised: being strategic, it has implications for not just the economy but also national defence and security. And yet, the project could not take off because of a setback that cropped up-the land earmarked for it could not be acquired.

Presumably, illegal stone quarrying was the major hindrance. At present, India has operational storage capacity of 5.33 mt underground crude oil at three locations: Visakhapatnam (1.33 mt) in Andhra Pradesh and Mangalore (1.5 mt) and Padur (2.5 mt) in Karnataka. The Central government also cleared 2.5-mt expansion at Padur. The three storages together can meet the country’s crude oil requirement for 10 days. The new plant in Odisha and expansion at Padur will take the reserves to 21 days, if and when this happens.

Unable to provide land, the Odisha government urged the Centre in 2022 to explore other sites in the State for a possible enhancement of the output. Two years later, although a new Bharatiya Janata Party-led government was formed, there has hardly been any further progress on this issue. One wonders whatever happened to the ‘double-engine sarkar’ that the saffron party zealously peddled all over the country. The Centre earlier requested the original Chandikhol site be reconsidered by the state authorities. This should have made a difference because the project has the potential of generating around 4,000 construction jobs. Alas, red tape seldom loosens.

At the heart of the issue is systemic sclerosis. Bureaucratic inertia tends to perpetuate itself. Officials often prefer procedural caution over decisive action because the risks of decision-making are immediate and personal, whereas the costs of delay are diffuse and collective. In this environment, the safest course is often to postpone decisions rather than resolve them. Illegal quarrying, which by the way is a national phenomenon, further complicates the situation; and it surely exposes another malady in the system. More crucially, efforts are seldom made to stem the rot, which is the bane.

One should note that if illegal activity can persist in a designated strategic zone, it means that the local administration has collapsed. Addressing such issues requires not only technical solutions but also a political will and institutional discipline. Moreover, the BJP must acknowledge the fact that it has to match the “double-engine governance” rhetoric with actual performance. Political alignment may ease coordination, but it cannot substitute for functional administrative systems. Without streamlined processes, clear accountability, and decisive leadership within the bureaucracy, even politically aligned governments may struggle to deliver results.

On that count, the Chandikhol oil reserve project is more than a delayed infrastructure initiative. It is a mirror reflecting the deeper structural weaknesses of the country’s administrative machinery. If India is to safeguard its economic and strategic interests, it must confront this systemic sclerosis head-on. That means simplifying approval processes, strengthening regulatory enforcement, ensuring transparent land acquisition mechanisms, and creating institutional structures capable of fast-tracking projects of national importance. In fact, the country may find itself repeatedly unprepared and gasping when global crises strike.