"As in most advanced nations, India will construct storage tanks for building stocks of crude oil. These (stocks) will be for providing oil security in times of war or a war-like situation," the official said.

"The stocks will be used (for producing products) in times when the international prices are too steep or too volatile." The official clarified that the proposal had been pending since October 1995 and was floated after product prices rocketed to a new high.

"It is not a fallout of the sanctions imposed by the US and Japan," he added. The US and Japan had imposed sanctions on India last week when New Delhi exploded five nuclear devices.

According to a government document India's aim was to build strategic crude stock of 12.55 million tonnes, enough for keeping its refineries in operation for 45days. But initially, strategic cover of 4.25 million tonnes of imported crude would be built to provide for 15 days of contingent supply, said the document prepared by the Petroleum Ministry's planning wing, the Oil Coordination Committee.

The scale-down to 15 days was being done to lower the cost of constructing the storage tanks and the crude import bill, and to ensure quick completion. For the 15-day cover, India would need to build additional storage tank capacity of 5.66 million tonnes at a cost of Rs 66.62 billion $(1.6 billion).