The government is mulling building a Rs 2,760 crore (Rs 27.60 billion) strategic storage facility by 2007-08 to stock 45-days requirement of liquefied petroleum gas as cover for emergencies.
"A plan to build storage facility for 530,000 tonnes of LPG, enough to meet the country's 45-days requirement, in phases is under active consideration," official sources said in New Delhi.
In phase-I, tankages to stock 37-days cover of 250,000 tonnes LPG is planned by 2005-06. Another 165,000 tonnes storage facility would be added by 2006-07 to take the total cover to 41 days, while by 2007-08 another 115,000 tonnes facility would be created to provide for 45-days cover.
"Total investment will be about Rs 2760 crore including Rs 120 crore (Rs 1.20 billion) for downstream infrastructure," they said.
The strategic LPG reserves are proposed to be built by a separate corporation that would carry out detailed feasibility of proposed tankages in different regions. A cess on all petroleum products -- LPG, kerosene, petrol and diesel -- may be levied to fund the construction and inventory cost.
"The strategic LPG reserves are being built keeping in mind the sensitivity of the mass-consumed cooking medium, increased dependence on imports (to meet domestic requirement) and unscheduled breakdowns in indigenous production," sources said, pointing that India imported large quantities of LPG last year following shutdown of the country's largest LPG producer Reliance Industries' Jamnagar refinery.
India currently has tankages to stock about 11 days requirement of LPG, sources said, adding, "This inventory is highly vulnerable."
The government anticipates LPG demand to rise to 11.631 million tonnes by 2006-07 from just over 7 million tones currently.
The LPG demand in north will scale to 3.709 million tonnes, necessiating a strategic tankage of 209,000 tonnes in the region, while fuel requirement in south is anticipated at 3.345 million tonnes, forcing a strategic tankage of 188,000 tonnes.
In east, 58,000 tonnes of tankage would be built as cover to the demand of 1.573 million tonnes and 75,000 tonnes tankage would be constructed in the western region to insure rise in demand to 3.003 million tonnes by 2006-07.
Sources said strategic LPG tankages would be built at Kandla, Ajmer, Loni/Piyala, Bahadurgarh, outskirts of Delhi and Bhatinda. In east, strategic storages are to be built at Haldia, Vizag, Paradip, while in west, Kandla, Usar, Dumad (Vadodara) and Hazira would have the facility. Similarly, strategic LPG storages are proposed to be built at Mangalore, Vizag, Ennore and Kakinada for the southern region.