New Delhi: At a time when Indian economy has not been left untouched by the global economic slowdown, the spike in the crude oil prices in international market owing to the rift between US and Iran over Strait of Hormuz has posed a serious trouble for the Ministry of Petroleum.

According to the sources in the Ministry, the simmering tension between US and Iran over the oil lane has led to a troublesome situation, which is why it has become crucial for India to have strategic reserve for crude oil.

India, which imports 80 percent of crude oil from other nations, is planning to expand the strategic petroleum reserves to maintain undisrupted oil supply in the country. As per the estimates made by the Petroleum Ministry, the new policy would increase the total expenditure by two folds raising the cost to around Rs 20,000 crore.

Constant threat given by Iran to shut down the Strait of Hormuz would disrupt oil supply in the country. It will not only affect the crude oil prices but also have drastic impact on the oil supply to different nations. Given the situation, the Ministry is taking a serious note of strategic oil reserves. However, the increasing crude oil prices have been the biggest roadblock.

Eight years back, Government of India decided to construct oil reserves in Vishakhapatnam, Mangalore and Padur. The Visakhapatnam oil reserve that can hold 11.3 lakh tonne of crude oil is in its last phase. The three reserves can cater to the oil demand in the country for 15 days in case of crises.

In 2003-04 when the project was proposed it was decided to complete the construction work in three year. During that time it was gauged that overall expenditure will be to the tune of Rs 10,000 crore.

However, the Ministry expects that it would require an investment of Rs 20,900 crore especially at a time when one barrel of crude oil costs USD 108.62.

The Ministry is hopeful that the Centre would take a serious note of the global political scenario and provide monetary assistance as per the requirement.