What Happened
- Assam Chief Secretary Ravi Kota stated on March 11, 2026, that local refineries in the state can meet only about 30% of Assam's LPG demand, signalling a potential cooking fuel shortage.
- All four refineries operating in Assam are affected by the West Asia disruption cascading through the national LNG supply chain.
- Assam's four refineries: three operated by Indian Oil Corporation (IOC) at Digboi, Guwahati, and Bongaigaon; one by Numaligarh Refinery Limited (NRL) at Numaligarh.
- A high-powered committee at the Chief Secretary level was constituted to review supply position regularly; a media monitoring committee was also set up to counter panic-buying rumours.
- Chief Minister Himanta Biswa Sarma separately reassured residents that there is no actual shortage — the 30% local capacity figure reflects a structural baseline capacity constraint that exists regardless of the current crisis.
- Assam Police warned of strict action against those spreading LPG shortage rumours.
Static Topic Bridges
LPG Supply Chain in India — Import Dependence and OMC Role
India's LPG supply chain involves domestic refinery production (~35% of demand) and imports (~65% of demand), with imports sourced primarily from the Middle East (Saudi Arabia and Qatar account for ~85–90% of LPG imports). The supply chain is dominated by three state-owned Oil Marketing Companies — Indian Oil Corporation (IOC/IOCL), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) — which together manage over 90% of LPG imports and serve over 32.94 crore active domestic LPG connections through 25,481 distributors. LPG retail prices for domestic use are regulated; the international benchmark used for pricing is the Saudi Contract Price (Saudi CP). OMCs absorb under-recoveries when regulated prices are below cost, compensated periodically by government subsidy.
- India's LPG demand split: ~35% domestic production, ~65% imports
- Import sources: ~85–90% from Saudi Arabia and Qatar (predominantly via Strait of Hormuz)
- Three major OMCs: IOC, BPCL, HPCL — manage 90%+ of LPG distribution
- Active domestic LPG connections (OMCs): 32.94 crore
- LPG distributors (OMC network): 25,481 nationwide
- Pricing benchmark: Saudi Contract Price (Saudi CP) — international reference
- FY 2026-27 LPG subsidy to OMCs: ₹30,000 crore approved
- Domestic LPG under-recovery (FY 2024-25): estimated ~₹40,500 crore for the industry
Connection to this news: Assam's 30% local production coverage means 70% must travel from outside the state — primarily from IOC's refineries in other states or via OMC import terminals — making the state disproportionately exposed to any national supply disruption.
Assam's Petroleum Refinery Landscape
Assam is historically significant as India's oldest oil-producing state — the Digboi oil field, discovered in 1889, is one of the oldest continuously producing oil fields in the world. The four refineries in Assam collectively represent a significant refining heritage but have limited LPG yield relative to overall crude processing capacity. Numaligarh Refinery Limited (NRL) is a joint venture with GOI, Assam government, and BPCL; it has been undergoing capacity expansion from 3 MMTPA to 9 MMTPA. IOC's Bongaigaon Refinery and Petrochemicals Ltd. (BRPL) handles a mix of crude from Assam's oil fields and import substitution.
- Digboi Refinery (IOC): India's oldest operating refinery, established 1901; capacity ~0.65 MMTPA
- Guwahati Refinery (IOC): commissioned 1962; capacity ~1 MMTPA
- Bongaigaon Refinery (IOC/BRPL): commissioned 1979; capacity ~2.35 MMTPA
- Numaligarh Refinery Limited (NRL): JV (GOI + Assam govt + BPCL); capacity expansion from 3 to 9 MMTPA underway
- Combined Assam refinery capacity: ~7 MMTPA (but LPG yield is a fraction of total output)
- Crude source: mix of Assam fields (Duliajan, etc.) and crude transported from elsewhere
Connection to this news: Despite having four refineries, Assam's structural LPG deficit (only 30% local coverage) highlights the mismatch between refinery capacity and specific product (LPG) yield — refineries optimised for petrol/diesel/naphtha produce limited LPG as a byproduct.
Energy Security — Diversification and Buffer Stock Principles
Energy security is defined as reliable, affordable access to adequate energy supplies. For a landlocked/pipeline-dependent state like Assam, LPG security depends on: (a) pipeline connectivity (India's GAIL-operated Assam–Bengal natural gas pipeline), (b) surface transport of LPG cylinders from bottling plants, and (c) buffer stocks maintained by OMCs and the government. The West Asia crisis has triggered a nationwide reassessment of strategic petroleum reserves (SPR) adequacy. India maintains SPR of crude oil at Visakhapatnam, Padur (Karnataka), and Mangaluru (Karnataka) — covering approximately 9.5 days of consumption — managed by Indian Strategic Petroleum Reserves Ltd. (ISPRL). No equivalent strategic LPG reserve exists at national scale.
- India's Strategic Petroleum Reserves (crude oil): ~5.33 million tonnes at 3 locations
- SPR locations: Visakhapatnam (AP), Padur and Mangaluru (Karnataka)
- SPR coverage: ~9.5 days of consumption
- Managing entity: Indian Strategic Petroleum Reserves Ltd. (ISPRL), under Ministry of Petroleum and Natural Gas
- No dedicated strategic LPG reserve currently maintained
- Assam government response: High-powered committee (Chief Secretary level) for supply monitoring; media monitoring committee against rumours
Connection to this news: The Assam LPG situation reveals a gap in India's energy security architecture: while crude SPR exists, the lack of a strategic LPG buffer means any supply chain disruption immediately flows through to consumers, particularly in geographically remote northeastern states.
Key Facts & Data
- Assam's local refineries meet ~30% of state LPG demand (structural capacity constraint)
- Four refineries in Assam: IOC Digboi, IOC Guwahati, IOC Bongaigaon, NRL Numaligarh
- Digboi Refinery: India's oldest, est. 1901; capacity ~0.65 MMTPA
- NRL: JV of GOI + Assam Govt + BPCL; capacity expansion from 3 to 9 MMTPA underway
- India's LPG demand: ~65% met by imports (85–90% sourced from Saudi Arabia/Qatar via Hormuz)
- India's crude oil SPR: ~5.33 million tonnes at Visakhapatnam, Padur, Mangaluru (~9.5 days cover)
- OMCs' active LPG connections: 32.94 crore; distributor network: 25,481
- FY 2026-27 LPG subsidy (OMCs): ₹30,000 crore approved by government