India to Impose Levies on LPG and Natural Gas Users to Fund Strategic Reserve

India is considering levying charges on users of liquefied petroleum gas (LPG) and natural gas to fund its $42 billion multi-fuel strategic reserve program. The plan aims to create stockpiles that cover about two months of crude oil demand, six weeks of LPG consumption, and provide emergency fuel buffers for the country.

The Ministry of Petroleum and Natural Gas is proposing a levy of 1.29 Indian rupees ($0.0136) per kilogram of LPG, which would raise approximately $460 million annually. For natural gas, the ministry has proposed a levy of 1.43 rupees per standard cubic meter, generating around $1 billion per year at current consumption levels.

The funds raised from these levies will primarily be used to finance cooking and natural gas storage infrastructure. The Indian government 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 decade.