India is widening its energy security strategy beyond emergency measures, with policy changes spanning strategic oil reserves, domestic gas production, exploration and pipeline infrastructure.
The approach could increase capital spending by state-run oil companies, particularly ONGC, while supporting India's push to raise domestic production and reduce import dependence.
The government is also examining a third strategic petroleum reserve, alongside the existing 45-day oil stock. Citi said India's cumulative LPG under-recoveries had crossed Rs590 billion as of July 2026, making inventory policy a key monitor for oil marketing companies.
Policy Push Extends Across Oil and Gas
ONGC has been directed to develop a 1.75 million tonne strategic oil reserve, with an estimated cost of Rs150 billion, Citi said. The government has also expanded deepwater exploration support and approved the Samudra Manthan scheme, which provides incentives for exploration and production.
In natural gas, the government has set targets for new LNG capacity, approved coal gasification incentives and introduced measures to accelerate city gas projects.
Citi said the policy package now goes beyond crisis response, describing it as a "multi-pronged energy security agenda" spanning strategic oil reserves, import substitution, domestic production, gas adoption and upstream exploration.
The brokerage said ONGC could see higher incremental capital deployment, while IOC, BPCL and GAIL could benefit from gas infrastructure and pipeline expansion.
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