What Happened
- India's LPG supply system — designed for operational throughput rather than strategic stockpiling — is experiencing severe strain following the effective closure of the Strait of Hormuz since approximately March 1, 2026.
- India imports approximately 62% of its 31.3 million-tonne annual LPG consumption, with 85-90% of those imports transiting through the Strait of Hormuz.
- Total LPG storage capacity in India is approximately 1.9 million tonnes — equivalent to only about 22 days of import supply — compared to India's strategic crude oil reserves which cover approximately 9.5 days of consumption.
- The IEA has specifically flagged the absence of large-scale underground LPG storage as a critical infrastructural gap in India's energy security architecture.
- There are no concrete government proposals currently under consideration to substantially increase underground LPG storage capacity.
- LPG consumption growth has outpaced infrastructure investment: imports tripled from 2011-12 to 2024-25, reaching approximately 20 million tonnes annually.
Static Topic Bridges
LPG vs. Crude Oil: Strategic Reserve Asymmetry
India's energy security infrastructure treats crude oil and LPG very differently. For crude oil, India maintains a dedicated Strategic Petroleum Reserve (SPR) at three underground rock cavern facilities (Visakhapatnam, Mangaluru, Padur), holding 5.33 million tonnes — approximately 9.5 days of consumption. This SPR was built after recommendations following the 1999 Kargil conflict. No equivalent strategic reserve exists for LPG, which is stored in distribution-chain facilities sized for daily throughput rather than weeks-long buffers.
- India's SPR for crude: 5.33 million tonnes at three facilities; Phase 2 expansion (Chandikhol, Padur extension) under development.
- LPG storage in India: approximately 1.9 million tonnes total (across mounded storage bullets and LPG spheres at refineries and terminals).
- SPR authority: Indian Strategic Petroleum Reserves Limited (ISPRL), a subsidiary of Oil Industry Development Board (OIDB).
- IEA recommendation (general): countries should hold 90 days of net petroleum product imports in strategic reserves.
- India's crude SPR covers ~9.5 days (well below IEA's 90-day standard, as India is not an IEA member but aspires to align).
Connection to this news: The contrast between India's (limited) crude SPR and its near-zero strategic LPG reserves is a policy design failure: planners built the SPR system with crude in mind but did not create an equivalent system for the cooking fuel used by 33 crore households.
LPG Demand Growth and the Ujjwala Effect
The Pradhan Mantri Ujjwala Yojana (PMUY), launched in 2016, succeeded dramatically in expanding LPG coverage from approximately 55% of Indian households to over 99% by 2024. While this was a major public health achievement (replacing biomass burning that caused severe indoor air pollution, estimated to cause 500,000–600,000 premature deaths annually in India), it also dramatically increased India's structural dependence on imported LPG. The demand surge was not accompanied by proportionate investment in domestic production, storage, or supply chain diversification.
- PMUY launched: May 1, 2016; Phase 1 target: 5 crore connections to BPL families.
- Ujjwala 2.0 (2021): additional 1 crore connections including migrants and those without ration cards.
- LPG coverage: from 55% (2014) to 99%+ (2024) of households.
- India LPG imports: tripled from ~6.8 million tonnes (2011-12) to ~20 million tonnes (2024-25).
- Indoor air pollution from biomass burning: WHO estimates ~2.5 million premature deaths globally; India's share was significant.
- LPG consumption (2024-25): 31.3 million tonnes; 62% imported.
Connection to this news: The Ujjwala success created a demand shock that the supply infrastructure was not prepared for — the crisis reveals that welfare scheme design must account for long-run supply chain resilience, not just access expansion.
India's Natural Gas and LPG Production Infrastructure
India's domestic LPG production comes as a byproduct of crude oil refining and natural gas processing. The primary domestic sources include ONGC's offshore platforms (primarily in the Mumbai High field), GAIL's LPG recovery from natural gas pipelines, and refinery outputs. India's domestic gas production has been declining from the KG-D6 (Krishna-Godavari Basin) fields operated by Reliance, though new investments in domestic exploration are underway.
- India's domestic LPG production: approximately 11.3 million tonnes annually (2024-25), covering ~36% of total requirement.
- Major domestic LPG producers: Indian Oil Corporation (IOC), Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL) — PSU refineries.
- ONGC's Mumbai High: primary offshore oil field, accounts for large share of crude input to PSU refineries.
- KG-D6 basin: Reliance Industries' gas field; production had declined significantly before recovery efforts.
- GAIL: India's primary gas transmission and processing company; operates LPG recovery units along pipeline network.
- Government response during crisis: domestic LPG production increased by ~25% through operational changes.
Connection to this news: The limited scope for quick domestic production increases (the 25% increase represents a ceiling driven by refinery throughput constraints) underlines that the only structural solution is either large-scale LPG storage or supply chain diversification — neither of which has been prioritised pre-crisis.
Key Facts & Data
- India's LPG consumption (2024-25): 31.3 million tonnes; 62% imported
- LPG imports from Middle East via Hormuz: 85-90% of total imports
- India's LPG storage capacity: ~1.9 million tonnes (~22 days of import supply)
- India's crude SPR: 5.33 million tonnes at Visakhapatnam, Mangaluru, Padur (~9.5 days)
- LPG import volume (2024-25): ~20 million tonnes (tripled from 6.8 MT in 2011-12)
- PMUY: launched May 2016; increased household LPG coverage from 55% to 99%+
- Domestic LPG production increase during crisis: ~25% (operational limit)
- Government booking interval change: 21 days → 25 days
- IEA flag: absence of underground LPG storage as critical infrastructure weakness