Lacking long-term storage, India must rely on imports to manage LPG supply
In 2024–25, India's domestic LPG production stood at approximately 13 million tonnes while consumption was around 31 million tonnes — a gap of 18 million tonnes met entirely through imports.
This broadly represents a 60-40 import-to-domestic split, with import dependence rising from 47% in 2015 to 60% today, driven by a rapid expansion of household LPG connections under the Ujjwala Yojana and rising commercial demand.
India lacks long-term LPG storage infrastructure — the two underground LPG caverns at Mangaluru and Visakhapatnam have a combined capacity of only about 1.4 lakh tonnes, less than half a month's requirement.
The ongoing West Asia conflict's disruption of Strait of Hormuz shipping — through which ~90% of LPG imports transit — exposed these structural vulnerabilities and forced emergency resort to alternative fuels and supply diversification.
Experts and policy analysts noted that India's LPG supply system is designed for continuous-flow operations rather than strategic stockpiling, leaving it structurally vulnerable to external shocks.
India's Energy Mix and Cooking Fuel Transition
India's transition from traditional biomass-based cooking fuels to clean LPG has been one of the most significant energy policy achievements of the last decade, but it has simultaneously created a new import dependency.
Key Details
- LPG connections grew from ~140 million in 2014–15 to over 320 million by 2025, driven by Pradhan Mantri Ujjwala Yojana (PMUY, launched 2016) which targeted BPL households.
- India became the world's second-largest LPG consumer (after China) as a result of this rapid expansion.
- LPG production is largely a byproduct of crude oil refining and natural gas processing — it cannot be independently ramped up without increasing overall refinery throughput or gas extraction.
- The government's PAHAL/DBTL scheme (Direct Benefit Transfer for LPG) eliminated the manual subsidy and provided cash transfers to over 250 million beneficiaries, reducing leakage.
The very success of the LPG expansion drive created structural import dependency; the 60-40 import ratio is a direct arithmetic consequence of consumption growing faster than domestic refining capacity.
Strategic Energy Reserves: Crude vs. LPG
India has invested significantly in strategic crude oil reserves but has no equivalent strategic LPG reserve, creating an asymmetric vulnerability in its energy security architecture.
Key Details
- Strategic Petroleum Reserves (SPR) for crude: ~5.33 million tonnes at Visakhapatnam, Mangaluru, and Padur — covering approximately 9–12 days of import requirements.
- Hydrocarbon exploration and production (E&P) is governed by the OALP (Open Acreage Licensing Policy) and HELP (Hydrocarbon Exploration and Licensing Policy, 2016) — but these primarily target crude and gas, not LPG.
- LPG storage infrastructure is predominantly above-ground bullet tanks at bottling plants — designed for distribution throughput, not multi-month strategic reserves.
- Underground LPG caverns (Mangaluru, Visakhapatnam): 1.4 lakh tonnes combined — India's only LPG strategic reserve infrastructure.
- Japan and South Korea maintain 90-day+ LPG strategic reserves; India has no equivalent policy mandate.
The 2026 Hormuz crisis has triggered calls for India to establish a dedicated LPG strategic reserve policy, analogous to the SPR framework for crude oil.
Piped Natural Gas (PNG) as an LPG Alternative
A long-term structural solution to India's LPG import vulnerability lies in expanding the Piped Natural Gas (PNG) network, which would reduce household dependence on imported LPG cylinders.
Key Details
- City Gas Distribution (CGD) network: India's CGD rollout under PNGRB (Petroleum and Natural Gas Regulatory Board) has expanded to 295 geographical areas covering 97% of India's population and geography (as of 2023–24).
- PNG connections: grew from ~2 million in 2014 to over 12 million by 2024–25; target is 100 million connections by 2030.
- CNG for vehicles and PNG for households together constitute the "gas economy" vision articulated in India's National Gas Policy.
- Natural gas imports (LNG) are also partially Hormuz-dependent, but the supply chain is more diversified (Australia, Qatar, USA) and LNG can be stored at import terminals.
- PM Urja Ganga pipeline project connects eastern India to the natural gas grid — previously underserved by PNG infrastructure.
Faster PNG expansion would insulate Indian households from LPG supply shocks, but the infrastructure rollout in semi-urban and rural areas will take years — making short-term LPG import dependency an unavoidable reality.
- LPG production (2024–25): ~13 million tonnes; LPG consumption: ~31 million tonnes.
- Import-domestic split: approximately 60% imported, 40% domestic.
- Import dependence trend: 47% in 2015 → 60% in 2025 (CAGR ~1.4 pp/year).
- LPG imports via Hormuz: ~90% of imports transit the Strait of Hormuz.
- Underground LPG storage: 2 caverns (Mangaluru + Visakhapatnam); combined ~1.4 lakh tonnes.
- India's monthly LPG consumption: approximately 2.6 million tonnes (31 MT / 12).
- PMUY connections: 100+ million BPL households.
- PNG connections (2024–25): ~12 million; target 100 million by 2030.
- CGD network coverage: 295 geographical areas, ~97% of India's population.