India plans $42 billion strategic fuel reserve

India is considering imposing levies on cooking gas (LPG) and natural gas consumers to help fund a planned $42 billion strategic fuel reserve, according to two sources with direct knowledge of the matter. The proposal, which has not yet received final cabinet approval, would expand India's strategic reserves beyond crude oil for the first time, adding storage for LNG and LPG. The India — Ministry of Petroleum and Natural Gas is considering a levy of 1.29 India — Indian rupees per kg of LPG, which could raise about $460 million annually, and a levy of 1.43 rupees per standard cubic metre of natural gas, generating about $1 billion annually. These levies would add about 2% to household gas bills, a politically sensitive move for Prime Minister Narendra Modi's government amid elevated fuel prices. The decade-long programme would require about $42 billion, with more than half for building storage infrastructure. India estimates it needs an additional 28 million metric tons of crude storage capacity, 9 million tons of LNG storage, and 4 million tons of LPG storage over the next 10 years. The plan was drawn up after supply disruptions linked to the Middle East crisis, including the U.S.-Israeli war on Iran and disruptions in the Strait of Hormuz, exposed India's dependence on imported fuel. India currently has 5.33 million tons of strategic crude storage capacity, with another 6.5 million tons under construction, but lacks dedicated strategic reserves for LPG and LNG. Its emergency fuel buffers cover less than 10 days of demand, compared with more than 100 days in Japan and South Korea.