India weighs levies on gas and LPG to fund a $42 billion strategic fuel reserve plan

Oilprice.com reported on Wednesday 5 August 2026, citing the Business Standard newspaper, that India's government is considering levies on natural gas and liquefied petroleum gas (LPG) consumption to fund part of a $42 billion strategic fuel reserve programme. The levies would raise about $1.5 billion a year.

The proposal includes a levy of 1.29 rupees ($0.0136) per kilogram of LPG, expected to generate roughly $460 million a year, and 1.43 rupees per standard cubic metre of natural gas, raising about $1 billion annually at current consumption. Unlike India's existing strategic petroleum reserve system, the plan would create dedicated emergency stockpiles for LNG and LPG alongside additional crude storage, with the decade long programme targeting capacity covering roughly two months of crude oil and LNG demand and about six weeks of LPG consumption.

India estimates it needs an additional 28 million tonnes of crude storage capacity, 9 million tonnes for LNG and 4 million tonnes for LPG over the next decade. It currently has 5.33 million tonnes of government owned strategic crude storage with a further 6.5 million tonnes under construction, but no dedicated strategic reserves for LNG or LPG, and its existing emergency reserves cover less than 10 days of demand, against around 100 days in Japan and South Korea according to Reuters. The proposal has not yet received cabinet approval and, if adopted, would raise household gas bills by about 2%.