"Oil security has come to occupy a key position in the present policy matrix of our government. We are examining the feasibility of establishing strategic storage of crude oil and petroleum products in our country to create a buffer for meeting unforeseen disturbances and strengthening India's oil security," Vajpayee said at the Fifth International Petroleum Conference, Petrotech 2003.

Cautioning that without substantial domestic production, the nation would be subject to volatility in crude oil supplies and prices and 'oil security' would be difficult to achieve, Vajpayee said, "We are aware of the need to find viable strategies to explore, produce and refine more from our own hydrocarbon resources."

It is for achieving this objective India had opened up the petroleum sector, where public sector units had been pre-dominant in the last four decades, for private and foreign investment, Vajpayee said.

Not only the government had encouraged both domestic and international enterprises to supplement the efforts of PSUs, the petroleum companies were also looking at new areas both within the country and outside to match the rapidly growing demand for petroleum products.

"In the petroleum industry, globalisation has provided an opportunity for India to be a significant centre for equipment and services both in upstream and downstream sectors," he said.

Vajpyee promised to put in place a transparent and independent regulatory system to ensure a healthy and sustained development of the hydrocarbon sector in the country and said, "The Petroleum Regulatory Bill is before Parliament and we will strive to ensure its early passage."

India, as one of the five largest economies of the world in purchasing parity terms, would witness considerable rise in per capita energy consumption, particularly with 8 per cent gross domestic product growth envisaged in the coming years, Vajpayee said.

As such India and China alone account for nearly half of the total Asia Pacific energy demand, which was growing rapidly, Vajpayee said, adding that "adequate, affordable and sustainable supply of energy is one of the fundamental parameters determining the economic growth of any country."

"Energy is to national development what oxygen is to human life," he added.

In this context, Vajpayee said there was an urgent need to promote conservation of energy to secure economic development and added that this should become a way of life in government, industry and society.

India so far had been more dependent on conventional sources of energy like coal, hydel, oil, gas and atomic energy, Vajpayee said.

There was a possibility that with the harnessing of non-conventional energy sources like sun, wind, biogas, biomass, agricultural and industrial wastes energy demand of people living in the countryside and far flung areas could be met better, he noted.

Earlier Petroleum Minister Ram Naik said in his welcome address that a bill was under consideration of Parliament to create a regulator, which would ensure competition and a level playing field for the benefits of customers.

Listing out steps taken by government to liberalise the petroleum sector, he said, "We have to build a strong industry in which both the national oil companies and the private operators have an equal scope for growth."