India could soon add a small charge to cooking and natural gas bills to help fund a massive new fuel reserve, sources say.

The plan is still under discussion and hasn’t been approved by the Cabinet yet. Here’s the bigger picture. India currently keeps strategic reserves of crude oil, but nothing similar exists for LPG or natural gas.

This proposal would change that. The idea is to build enough storage to cover about two months of crude oil and LNG demand, along with roughly six weeks of cooking gas supply.

That’s a meaningful jump from where things stand today, since India’s current crude reserves cover less than 10 days of demand, well short of countries like Japan and South Korea, which maintain buffers lasting more than 100 days.

The petroleum ministry is looking at a levy of Rs 1.29 per kg on LPG and Rs 1.43 per standard cubic metre on natural gas. Together, these charges could raise around $1.5 billion a year.

For a typical household, this would mean paying about 18 rupees more per cooking gas cylinder, adding roughly 2% to overall gas bills.

Industrial users of natural gas, including fertiliser plants, power stations and steel makers, could also see higher costs if the plan goes ahead.

The full reserve programme is expected to cost around $42 billion over the next decade, with storage planned for crude oil, LNG and LPG.

Discussions are being kept under wraps for now, partly to avoid stirring public concern given how politically sensitive fuel pricing tends to be in India.

Both the petroleum and finance ministries have not commented publicly on the proposal.

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