**India to Establish Strategic Liquefied Gas Reserves Amid Energy Supply Concerns**
India is set to enhance its energy security by expanding its strategic petroleum reserves to include liquefied petroleum gas (LPG) and liquefied natural gas (LNG). According to a report from Reuters, the initiative will involve the construction of new storage facilities at an estimated cost of $42 billion. This ambitious plan aims to bolster the country's energy reserves and mitigate vulnerabilities highlighted by recent geopolitical tensions.
The proposed stockpiles are designed to hold enough crude oil and LNG to meet approximately two months of demand, while the LPG reserves would be sufficient for around six weeks of use. The entire project is expected to take about ten years to complete, reflecting India's long-term strategy to secure its energy needs.
Currently, India imports nearly half of its LNG and about 60% of its LPG, primarily from the Middle East. Recent disruptions in energy supplies, particularly due to conflicts in the region, have raised concerns among consumers. The Indian government has worked to stabilize the situation and reassure households, which rely heavily on LPG for cooking.
The geopolitical landscape, especially the disruptions in the Strait of Hormuz—a crucial passage for global energy supplies—has underscored India's vulnerabilities in energy security. The situation was exacerbated by the US-Israeli attacks on Iran, which further complicated the energy supply chain.
In response to these challenges, the Indian government has already taken steps to enhance its strategic reserves. In June, it directed the state-run Oil and Natural Gas Corporation to construct and fill a new strategic petroleum reserve facility, which will increase the country's reserve capacity by one-third. However, India's current core strategic reserves are limited, providing only enough oil for about 5 to 10 days of consumption. In comparison, China's reserves can sustain consumption for 60 days, and Japan's reserves can last for an impressive 230 days.
The United States, meanwhile, has been actively releasing oil from its reserves in response to rising prices but still maintains approximately 37 days of stock. This highlights the varying degrees of preparedness among major economies when it comes to energy security.
To finance the construction of the new gas reserves, the Indian government is contemplating the introduction of additional levies on LNG and LPG consumers. However, this proposal is pending approval from Prime Minister Narendra Modi, as it may be politically sensitive in the context of high inflation and rising living costs.
The establishment of these strategic liquefied gas reserves is a critical step for India as it seeks to diversify its energy sources and reduce dependency on external suppliers. By building a more robust reserve system, India aims to enhance its resilience against potential supply disruptions and ensure a stable energy supply for its population.
As the global energy landscape continues to evolve, India's proactive measures reflect a growing recognition of the importance of energy security in safeguarding economic stability and supporting the nation's development goals. The successful implementation of this plan could serve as a model for other countries facing similar challenges in securing their energy futures.