India is looking for $1.5 billion in investments from global oil producers and traders to help it develop additional emergency crude stockpiles that will operate as a hedge against price volatility. According to HPS Ahuja, CEO of Indian Strategic Petroleum Reserves Limited (ISPRL), the plan is to construct subterranean caverns with a combined capacity of 6.5 million tonnes of petroleum at two locations.

India, which imports about 85% of its petroleum, reduced fuel sales taxes this month to alleviate the burden of rising oil costs on customers. The two additional reserves are a 4 million-tonne storage facility in Odisha’s eastern state of Chandikhol and a 2.5 million-tonne facility in Karnataka’s southern state of Padur.

He said: “We are taking the commercial model for building and filling the caverns, which will provide opportunity to the investor to make some profits.”

“India will continue to reserve first right over the crude stored in these caverns.”

“Strategic reserves are crucial for a growing consumer like India.”

In an earlier phase, India constructed 5.33 million tonnes of subterranean reserves in three locations, including Padur, that can meet the country’s oil demands for 9.5 days. The government bought crude to fill caverns in Visakhapatnam, Andhra Pradesh, and half of a facility in Mangalore, Karnataka while leasing the other half to Abu Dhabi National Oil.

ISPRL, which was founded in 2006, is looking for investors to help fill the Padur caverns. This month, roadshows will be held in New Delhi, Singapore, and London to attract investors to the new caverns.