Why is India’s Strategic Oil Reserve Project Stuck in Odisha
Odisha Chief Minister Mohan Manjhi (Image Odisha CMO)
Eight years after approval, India’s Odisha crude oil storage project remains stalled — raising urgent questions about energy security, political will, and the power of local vested interests
By RAVI SHANKER KAPOOR
New Delhi, March 10, 2026 — The war in the Middle East has underlined, for the nth time, one of the most lamentable features of governance in India: the tendency to wake up only when a crisis strikes. It has also exposed another systemic failure — that local politicians often wield more power than national policy.
Odisha’s Chandikhol Oil Reserve: A Project Eight Years in the Making
In 2018, the Central government approved the development of a 4-million tonne (MT) strategic crude oil reserve at a cost of Rs 8,743 crore in the Dankari hill region near Chandikhol, Jajpur district, Odisha. A project tied directly to national energy security and defence readiness, one would expect it to have been fast-tracked. It has not been. Red tape and illegal stone quarrying remain the principal obstacles — and behind them, the quiet but formidable power of local political elites.
When Local Politicians Override National Priorities
The general perception is that national issues are driven by leaders such as Prime Minister Narendra Modi, Home Minister Amit Shah, or former Congress president Sonia Gandhi. Their role matters — but in cases like this, the decisive power lies with local actors. The so-called chhutbhaiya neta — the small-time, neighbourhood politician, often dismissed as a sycophantic hanger-on — is, in practice, no pushover. He knows how to protect his turf. He can, and apparently does, effectively veto decisions made at the highest levels of the Central government.
Middle East Escalation Puts India’s Energy Security Under the Spotlight
With the latest escalation in the Iran conflict sharpening concerns over energy security, Indian Strategic Petroleum Reserves Limited (ISPRL) has reportedly urged the Odisha government to expedite land allotment for the early commissioning of the Jajpur strategic petroleum reserve. ISPRL, a special purpose vehicle under the Ministry of Petroleum and Natural Gas, is mandated to construct and manage India’s strategic crude oil storage infrastructure.
According to ISPRL’s website, the Government of India has already established 5 million metric tonnes (MMT) of strategic crude oil storage across three locations — Visakhapatnam, Mangalore, and Padur (near Udupi) — with Engineers India Limited (EIL) serving as the Project Management Consultant. The Odisha facility was conceived as a critical addition to this network, providing a buffer against global supply disruptions.
Double-Engine Sarkar, Single-Speed Progress
The facts are stark. The project was sanctioned eight years ago. The BJP has been in power in Odisha for over two years. ISPRL operates directly under the Central government. And yet, progress remains negligible. This is what the Modi government’s much-touted “double-engine sarkar” — the promise of accelerated development when the same party governs both the Centre and a state — looks like on the ground.
There is a wide and troubling gulf between rhetoric and reality. A self-proclaimed strong Prime Minister leads the Centre. His own party governs the state. The project is of unambiguous national importance, approved by his own government. And still, it cannot move forward.
Bureaucratic Apathy or Quarrying Mafia? The Answer May Be Both
What explains the deadlock? Reports point to a combination of bureaucratic foot-dragging by the state government and local administration, and the alleged interference of the stone quarrying mafia, which has financial interests in the Dankari hill area. Whether it is institutional inertia, vested interests, or a confluence of both — the outcome is the same: a strategic national asset remains unbuilt while global energy markets grow more volatile by the day.
The gulf between this government’s rhetoric and its record may, in the end, prove unbridgeable.
(This is an opinion piece. Views expressed are author’s own. Article brought in collaboration with The Hindu Chronicle.)
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