India Considers Gas Levy to Fund $42 Billion Strategic Fuel Reserve
India is considering imposing a small levy on cooking gas (LPG) and natural gas users to help fund a proposed $42 billion strategic fuel reserve programme, according to sources. The plan aims to strengthen the country’s energy security after supply disruptions during the Iran conflict exposed vulnerabilities in fuel imports.
The proposed reserve would, for the first time, include crude oil, liquefied natural gas (LNG), and LPG. Officials estimate the reserves would cover around two months of crude oil and LNG demand and six weeks of LPG consumption. The levies could generate nearly $1.5 billion annually, with a small increase in household gas bills.
The decade-long project would require significant new storage infrastructure, including 28 million metric tons of crude storage, 9 million tons of LNG storage, and 4 million tons of LPG storage. While the proposal is still under review and awaits cabinet approval, it reflects India’s efforts to reduce risks from global energy supply disruptions.
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