India Considers Levies on Cooking Gas Consumers for Strategic Fuel Reserves
India is considering imposing levies on cooking gas and natural gas consumers to fund its proposed USD 42 billion strategic fuel reserve programme. The plan aims to strengthen the country's protection against supply disruptions by expanding India's strategic reserves beyond crude oil to include liquefied natural gas (LNG) and liquefied petroleum gas (LPG).
The proposed stockpiles are intended to cover around two months of crude oil and LNG demand, as well as approximately six weeks of LPG consumption. The Petroleum and Natural Gas Ministry is considering a levy of Rs 1.29 per kg on LPG, which could raise about USD 460 million annually and increase the price of a standard domestic LPG cylinder by approximately Rs 18.
The proposed storage infrastructure for LPG and natural gas could be funded through consumer levies capable of raising about USD 1.5 billion annually. The combined charges could increase household gas bills by around 2 per cent. The method for collecting the levies has not yet been finalised, and the proceeds would primarily finance LPG and LNG storage infrastructure.