Petroleum Minister Ram Naik said on Monday the government planned to boost the country's strategic crude oil reserves to 45 days from 15 for an estimated cost of Rs 43.50 billion.
The statement came as the possibility of a United States-led war against Iraq loomed.
"We have been asked to conduct a study by a professional agency to finalise the creation of the strategic reserves," Naik told reporters after a meeting with Prime Minister Atal Bihari Vajpayee.
"We would like to have 45 days of strategic reserves," he said. "Right now it is just 15 days and Japan has 120 days."
He said two ways had been suggested to cover the cost of increasing the reserves. The two methods involved either government grants or a tax on petroleum products.