“We expect to hear some positive response during the visit. It is a win-win offer for both nations,” a senior oil ministry official said.

The proposal, if accepted by Kuwait, would help India to strengthen its emergency oil reserves and reduce its vulnerability to supply disruptions. For Kuwait, it ensures an assured market and a new hub for venturing into other east Asian countries.

Officials said India had made similar offers to other Gulf nations such as Oman, Iraq, Iran and Saudi Arabia. India depends on imports to meet its oil needs, and West Asia holds the key to its energy security.

According to provisional data of the petroleum ministry, cumulative crude oil imports for 2009-10 are up 19.6 per cent year-on-year at 153.2 million tonnes.

The crude storage facilities will be developed as joint ventures with the national oil companies of Gulf countries, which are traditional suppliers of crude, officials said.

The Gulf-based crude oil suppliers to India include Saudi Aramco, Kuwait Petroleum Corporation, Abu Dhabi National Oil Co and National Iranian Oil Company.

If the Gulf countries accept the offer, India can emerge as a regional hub in crude oil trade. The country is already a major exporter of refined petroleum products.

India imports over 80 per cent of its crude oil. Its oil storage infrastructure can meet the requirement for less than 30 days, while developed countries maintain reserves for 90 days.

“Given the volatility in crude prices, the storage terminals are intended as a buffer for the economy. This should ideally be done when oil prices were at their lows,” D. K. Joshi, principal economist with rating agency Crisil, said.

State-owned Indian Strategic Petroleum Reserves Limited (ISPRL) is building three storage facilities in Mangalore, Visakhapatnam and Padur in Kerala.

The first terminal being built at Visakhapatnam with a capacity of 1.33 million tonnes will be ready by the middle of next year. The other two terminals will take the total storage capacity close to 5 million tonnes.

India plans to increase its strategic petroleum reserves to 8.5 million tonnes by 2012. The country has an existing reserve of 3-3.5 million tonnes, held by BPCL, HPCL and IOC.

The three facilities are being built at a cost of about Rs 2,400 crore (at September 2005 prices), according to ISPRL.