India may impose a charge on cooking gas and natural gas on consumers to help fund a planned $42 billion strategic fuel reserve, according to two sources with direct knowledge of the matter, after disruptions from the Iran war exposed supply chain vulnerabilities.

The plan would extend India's strategic reserves beyond crude oil for the first time, with stockpiles designed to cover about two months of crude and liquefied natural gas demand, and around six weeks of liquefied petroleum gas, or cooking gas, consumption, the two sources said.

Under the plan, cooking and natural gas storage infrastructure would be financed through levies on users that could raise about $1.5 billion annually, the two sources said.

Ministry of Petroleum and Natural Gas is considering a levy of ₹1.29 ($0.0136) per kg of LPG, which would raise about $460 million a year based on current consumption and add about 18 rupees to the cost of a standard domestic cooking gas cylinder, the sources said.

For natural gas, the ministry has proposed a levy of ₹1.43 per standard cubic metre, generating about $1 billion annually at current consumption levels, the sources said.

It was not immediately clear how the levies would be collected. The proceeds would primarily fund natural and cooking gas storage infrastructure, while crude reserves and strategic fuel inventories would continue to be financed by the federal government, the sources said.

The Ministry of Petroleum and Ministry of Finance did not respond to requests for comment sent by Reuters on Tuesday (August 4, 2026).

Published - August 05, 2026 10:26 pm IST