West Asia conflict: CII proposes working with Centre to build strategic fuel, mineral reserves

The CII has pitched for collaboration between industry and the government for development of strategic reserves and buffer mechanisms for critical raw materials, fuels and intermediate goods.

New Delhi: Amid growing concern over disruption in oil and gas supply due to the ongoing West Asia conflict, the Confederation of Indian Industry (CII) has pitched for collaboration between industry and the government for development of strategic reserves and buffer mechanisms for critical raw materials, fuels and intermediate goods.

“Collaborative approaches to stockholding, shared infrastructure and improved data visibility can significantly strengthen national preparedness against future disruptions,” CII said in its 12-point industry agenda to deal with geopolitical crises.

It suggested that the companies may strengthen supply-chain resilience by identifying alternative sourcing corridors, diversifying vendor bases and building calibrated inventory buffers for critical inputs. This will reduce exposure to disruptions arising from concentrated maritime routes.

CII observed that the present situation represents a supply-side disruption, with pressures transmitted through energy costs, logistics and working capital cycles.

While the policy response has mitigated immediate risks, the evolving situation requires continued coordination between government and industry, it said.

“The policy approach has correctly focused on maintaining production continuity and supporting viable enterprises. The next phase requires industry to build on this foundation with practical and responsible actions,” said CII Director General Chandrajit Banerjee.

Supply disruption due to the US-Israel-Iran war has brought the need for expansion of strategic reserves in focus. The government-run Indian Strategic Petroleum Reserve Ltd (ISPRL) is largely responsible for maintaining the oil reserve in the country.

ISPRL runs three strategic reserve facilities with a combined storage capacity of 5.33 million tonnes. The underground storage facilities include Visakhapatnam (1.33 million tonnes) in Andhra Pradesh, and Mangaluru (1.5 million tonnes) and Padur (2.5 million tonnes) in Karnataka.

To reduce dependence on imported fossil fuels, CII has suggested that the companies should accelerate investments in energy transition, including renewables, green hydrogen and industrial energy efficiency. “The current situation reinforces the need to reduce dependence on conventional fuels and build long-term energy resilience,” it said.

Wherever technically and commercially feasible, companies may explore switching from LPG to natural gas and other efficient energy options. This will support cost-optimisation, while contributing to a cleaner energy mix, CII suggested.

Businesses operating institutional kitchens and large food services may adopt innovative approaches to reduce fuel intensity, including the use of electric or bio-based cooking solutions and optimised consumption practices.

CII has also urged companies to maintain price stability by ensuring that the benefits of stable fuel prices and moderated logistics costs are transmitted to end-consumers and downstream partners. This will support inflation management and reinforce industry credibility.

“This is a moment for partnership. The government has created a strong enabling framework. Industry can complement this by ensuring continuity, supporting smaller enterprises and maintaining confidence across the economy. Such a coordinated approach will help India navigate the present situation, while strengthening long-term resilience,” said Banerjee.