India plans a significant expansion of its strategic fuel reserves, aiming to cover up to a month of domestic demand for crude, LPG, and LNG. The move follows disruptions from the Persian Gulf crisis, which exposed the nation's heavy reliance on Middle Eastern imports and led to sharp price spikes. Current reserves cover only about eight days of imports.

The government will develop new underground caverns and gas storage projects to reach a target of at least 120 million barrels of crude capacity. This initiative addresses vulnerabilities highlighted when the Strait of Hormuz was threatened, causing Brent crude to surge above $126 per barrel and LPG prices to jump nearly 46%. Refiners and fuel retailers currently hold over 70 days of oil demand, but government strategic reserves are minimal.

Five new strategic petroleum reserves are planned across various states, which could eventually increase India's reserve capacity to around 40 days of crude imports. The country also faces storage challenges for LPG and LNG, with current capacity sufficient for just two days of national consumption. Strengthening these stockpiles is seen as essential for consumer protection and enhancing India’s bargaining power.