India Eyes Levy on Gas Users to Fund $42 Billion Fuel Reserve

India is considering implementing a small charge on cooking and natural gas bills to fund a massive new fuel reserve. The plan, which is still under discussion, aims to build enough storage to cover about two months of crude oil and LNG demand, along with roughly six weeks of cooking gas supply.

The current strategic reserves of crude oil in India cover less than 10 days of demand, which is significantly lower compared to countries like Japan and South Korea. The new reserve programme is expected to cost around $42 billion over the next decade, with storage planned for crude oil, LNG, and LPG.

Discussions on the proposal are being kept under wraps due to concerns about public reaction given the politically sensitive nature of fuel pricing in India. If implemented, industrial users of natural gas could see higher costs, including fertiliser plants, power stations, and steel makers.