What Happened
- India currently imports approximately 60% of its total LPG requirement, making it the world's second-largest LPG importer — a dependence that has grown threefold over the past decade and a half.
- In FY2024–25, India produced about 12.8 million metric tonnes (MMT) of LPG domestically, against total consumption of approximately 31.3 MMT, leaving a gap of around 18–19 MMT filled by imports.
- About 90% of India's LPG imports transit through the Strait of Hormuz, meaning roughly 54% of India's total LPG supply depends on this single maritime chokepoint remaining open.
- India's daily LPG consumption is approximately 80,000 tonnes, with over 85% consumed by households — the disruption to Hormuz shipping has directly exposed this household dependency.
- The rapid expansion of domestic LPG coverage through schemes like PMUY, without commensurate growth in domestic production, accelerated import dependency even as LPG replaced traditional biomass fuels.
Static Topic Bridges
India's LPG Supply Chain: Production, Import, and Distribution
India's LPG is sourced from two streams: domestic production by refineries (IOCL, BPCL, HPCL, ONGC, Reliance, and private refiners) as a by-product of crude oil refining, and imports primarily from Gulf Cooperation Council (GCC) countries, the US, and other suppliers. Domestically produced LPG accounts for about 40% of supply. Imported LPG arrives as propane and butane at dedicated terminals and is blended before bottling. The government issued a production maximisation order on March 8, 2026, directing all refineries to divert C3 (propane) and C4 (butane/propylene/butenes) streams exclusively to the LPG pool, achieving a ~25% increase in domestic LPG output.
- FY2024–25: Domestic production ~12.8 MMT; total consumption ~31.3 MMT; import gap ~18–19 MMT
- India's LPG imports have tripled from approximately 7 MMT (2011–12) to about 20 MMT (2024–25)
- Three major OMCs (IOCL, BPCL, HPCL) handle import, bottling, and distribution
- LPG is a by-product of crude oil refining (and also extracted from natural gas processing); limited scope to boost refinery-level output without adding crude throughput
Connection to this news: The structural gap between stagnant domestic production and surging consumption — driven by clean-cooking policy expansion — is the root cause of India's LPG import vulnerability now exposed by the Hormuz crisis.
Strait of Hormuz: A Critical Maritime Chokepoint
The Strait of Hormuz is a narrow waterway between Iran and the Oman peninsula, connecting the Persian Gulf to the Gulf of Oman and thence the Arabian Sea. It is the world's most important oil transit chokepoint. The navigable channel is barely two miles wide in each direction. In 2024, more than one-quarter of total global seaborne oil trade and about one-fifth of global LNG trade passed through the Strait. For India, the Strait carries approximately 55% of LPG imports and nearly 30% of LNG imports.
- Located between Iran (north) and Oman/UAE (south); roughly 180 km long
- Around 20–21 million barrels per day (mb/d) of oil passed through in 2024 (EIA data)
- Only alternative bypass routes: Abu Dhabi's Habshan–Fujairah pipeline and Saudi Aramco's East–West pipeline (combined capacity ~3.5–5.5 mb/d, far below Hormuz flows)
- China, India, Japan, and South Korea together account for 67% of all crude flows through Hormuz
Connection to this news: India's 90% import-via-Hormuz exposure for LPG means any blockage directly translates into a domestic cooking gas shortage — demonstrating the geographic concentration risk at the heart of India's energy security vulnerability.
Pradhan Mantri Ujjwala Yojana (PMUY) and Clean Cooking Transition
PMUY was launched on May 1, 2016, to provide deposit-free LPG connections to women from Below Poverty Line (BPL) households, replacing traditional cooking fuels (firewood, cow-dung cakes, crop residue) that cause indoor air pollution. The scheme dramatically accelerated LPG penetration in rural India but simultaneously expanded the demand base for imported LPG without a corresponding supply strategy. As of March 2025, 10.33 crore PMUY connections have been distributed across India.
- Launched: May 1, 2016; nodal ministry: Ministry of Petroleum and Natural Gas
- Target: Initially 5 crore BPL women; expanded to 8 crore (PMUY 2.0), then further extended
- Beneficiaries: Women from SECC 2011 list, SC/ST households, forest dwellers, tea garden workers, river island communities
- Budgetary allocation: ₹8,000 crore (initial phase); Cabinet approved ₹12,000 crore for FY2025–26 for targeted subsidy continuation
- India's LPG coverage rose from ~55% of households (2014) to over 99% (2024)
Connection to this news: PMUY's success in enrolling 10+ crore new LPG users — a genuine public health and gender empowerment achievement — inadvertently deepened the import dependency that the current Hormuz disruption has exposed. This is the central tension the charts analysis reveals.
Energy Security: The Import Dependency Problem
Energy security refers to the reliable, affordable, and sufficient availability of energy. The International Energy Agency (IEA) framework identifies four dimensions: availability (physical supplies), accessibility (infrastructure), affordability (price), and acceptability (environmental). India's LPG situation fails on the accessibility and availability dimensions when a single chokepoint is disrupted. India's strategic petroleum reserves (SPR) — at Visakhapatnam (1.33 MMT), Mangaluru (1.5 MMT), and Padur (2.5 MMT), totalling 5.33 MMT of crude — provide about 9.5 days of national demand coverage, far below the IEA norm of 90 days. Critically, there is no strategic LPG reserve.
- India's total LPG storage capacity: approximately 1.9 million tonnes (~22 days of supply)
- IEA member countries maintain strategic reserves equivalent to 90 days of net imports
- India is not an IEA member but has an Association Agreement; its SPR covers crude, not LPG
- Phase 2 SPR expansion: Chandikhol (4 MMT, Odisha) + additional Padur (2.5 MMT) — total +6.5 MMT crude storage planned
- US LPG deal: India secured a 2.2 MTPA supply agreement from the US for 2026, ~10% of annual imports — a diversification step
Connection to this news: The import dependency story is ultimately an energy security story — rapid demand expansion driven by clean-cooking policy was not matched by either domestic production growth, strategic reserves for LPG, or supply diversification sufficient to hedge against a Hormuz disruption.
Key Facts & Data
- India is the world's second-largest LPG importer
- FY2024–25: domestic LPG production ~12.8 MMT vs. total consumption ~31.3 MMT (import gap ~18–19 MMT)
- India's LPG imports tripled from ~7 MMT (2011–12) to ~20 MMT (2024–25)
- ~60% of India's LPG is imported; ~90% of those imports transit the Strait of Hormuz
- India's daily LPG consumption: ~80,000 tonnes; over 85% is household use
- PMUY launched May 1, 2016: 10.33 crore connections distributed as of March 2025
- India's LPG storage capacity: ~1.9 MMT (~22 days); no dedicated strategic LPG reserve
- Strategic Petroleum Reserves (crude): Vizag 1.33 MMT + Mangaluru 1.5 MMT + Padur 2.5 MMT = 5.33 MMT total (~9.5 days)
- India's 2026 US LPG import deal: 2.2 MTPA (~10% of annual imports)
- Strait of Hormuz: carries >25% of global seaborne oil trade and ~20% of global LNG trade (EIA 2024 data)