The government plans to spend Rs 1,300 crore (Rs 13 billion) in the next two years to build strategic storage facilities for 15 days' consumption of crude and oil products, a top oil official said on Friday.

The government also plans to expand storage to 45 days of consumption by the end of 2006, said B K Chaturvedi, secretary at the ministry of petroleum & natural gas.

"Certainly the first phase we will complete in two years," he said.

He said storage areas for the reserves were being identified and work on tanks should start in a few months. A study marking out costs and technical details was underway.

"We propose to move very fast on this process," Chaturvedi told Reuters in an interview.

Preliminary estimates indicate the cost of maintaining 45 days' oil storage would be Rs 900 crore (Rs 9 billion) a year, he said.

India consumes roughly 100 million tonnes of oil products per year and has a refining capacity of 2.3 million barrels per day. The energy deficit country imports 70 per cent of its crude oil requirements, largely from the Middle East.

Chaturvedi said India was consulting with the Paris-based International Energy Agency on the building of strategic oil stocks and a seminar was planned in October in New Delhi.