The Indian government is proposing a new levy on households and businesses to help finance a $42 billion strategic fuel reserve, a move that could raise everyday costs for millions. The plan aims to build a larger stock of petroleum products to protect the economy from supply shocks, and the proposed charge would be collected through electricity and gas bills.
India has long relied on imports for most of its oil needs, and recent price volatility has spurred officials to expand the strategic petroleum reserve (SPR). Until now, the SPR has been funded mainly from the central budget, but the government says a dedicated levy will ensure a steady cash flow and reduce fiscal pressure.
Under the proposal, the levy would be a modest percentage added to utility bills, with the revenue earmarked for purchasing crude and building storage facilities. The Ministry of Petroleum and Natural Gas says the reserve will cover at least 30 days of national consumption, enhancing energy security.
Critics warn that the additional charge could push inflation higher, especially for low-income families already coping with rising living costs. Consumer groups have called for a transparent impact assessment before implementation.
The government plans to present the detailed levy framework in the upcoming budget session, after which the parliament will debate and vote on the measure.
Stakeholders will watch for the final bill, the exact rate of the levy, and any exemptions that may be offered to vulnerable households.