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Explained: Difference between LPG and LNG, and why West Asia war affected LPG supply more

March 24, 2026 6 min read Economics International Relations GS Paper 3 (Energy Security Infrastructure)
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What Happened

  • The West Asia conflict and Strait of Hormuz disruption triggered India's worst LPG shortage in decades, prompting widespread questions about why LPG was hit hardest while crude oil and LNG disruptions were less severe.
  • The distinction between LPG (Liquefied Petroleum Gas) and LNG (Liquefied Natural Gas) — two very different fuels that sound similar — became nationally relevant as households, restaurants, and industries faced supply cuts.
  • The government's emergency response included redirecting LNG for commercial users and promoting PNG (Piped Natural Gas) as an LPG substitute, making the differences between these four fuels practically significant for millions of households.

Static Topic Bridges

LPG: What It Is, How India Gets It, and Why It Was Hit Hardest

LPG stands for Liquefied Petroleum Gas. It is a mixture of propane (C₃H₈) and butane (C₄H₁₀) obtained as a by-product of petroleum refining or natural gas processing. LPG becomes liquid under moderate pressure at ambient temperature, allowing it to be stored and transported in pressurised cylinders. India distributes it through a network of bottling plants, tanker trucks, and local dealers. The supply chain ends at the consumer's home with a cylinder that must be booked and replenished periodically. LPG is India's dominant cooking fuel: approximately 330 million households use it, including 10 crore connections under the Pradhan Mantri Ujjwala Yojana (PMUY) for Below Poverty Line families.

India produces only about 40 percent of its LPG demand (around 12.8 MMT of the ~31.3 MMT consumed annually). The remaining 60 percent is imported. Critically, over 90 percent of LPG imports transit through the Strait of Hormuz. LPG is sourced from the Middle East (Qatar, UAE, Saudi Arabia account for about 97% of India's LPG imports). Unlike crude oil, where India has successfully diversified to Russia and the Americas, LPG diversification remained limited — making Hormuz blockage a direct, immediate supply shock.

  • LPG composition: propane + butane (C₃H₈ and C₄H₁₀).
  • Physical state: liquid under pressure in cylinders; vaporises at room temperature for use.
  • Calorific value: approximately 46-50 MJ/kg (higher than PNG, lower than CNG on weight basis).
  • India's LPG consumption (FY 2024-25): ~31.3 MMT.
  • Import dependency: ~60%; Middle East share: ~97% of imports.
  • Distribution: cylinder-based, subject to supply chain disruptions.

Connection to this news: LPG's import structure — concentrated in the Middle East, routed overwhelmingly through Hormuz, delivered via individual cylinders rather than continuous pipelines — is the structural reason this crisis hit cooking gas hardest and most immediately.

LNG: Why It Was Less Disrupted

LNG stands for Liquefied Natural Gas. It is natural gas (predominantly methane, CH₄) that has been cooled to approximately -162°C, reducing its volume by about 600 times for economical transport in specialised cryogenic tankers. At the destination, it is re-gasified at LNG terminals and fed into the domestic gas distribution grid. India imports approximately 9.5-10 million metric tonnes per annum (MMTPA) of LNG — about 50 percent of its total gas requirements — primarily from Qatar, Australia, the US, and Russia. The key distinction from LPG: India's LNG infrastructure (terminals and long-term contracts) is more diverse, and LNG is not routed exclusively through Hormuz. Qatar's LNG exports do transit Hormuz, but India also has long-term contracts with Australia (Gorgon, Pluto projects) and the US (Sabine Pass), which do not involve the strait.

  • LNG composition: primarily methane (CH₄), ~85-90%.
  • Physical state: liquid at -162°C; stored in cryogenic tanks; re-gasified before pipeline delivery.
  • India's LNG imports: ~9.5-10 MMTPA (~50% of gas requirements).
  • Key LNG import terminals: Dahej (Petronet LNG, largest), Hazira, Kochi, Mundra, Ennore, Dhamra.
  • LNG suppliers: Qatar (dominant), Australia, USA, Russia (less Hormuz-dependent sources).
  • The government directed LNG for commercial uses (hospitals, educational institutions) during the LPG crisis.

Connection to this news: The government's ability to direct LNG to commercial users while managing the LPG shortfall shows the policy flexibility that pipeline gas infrastructure provides — a key argument for accelerating PNG/LNG infrastructure investment as part of energy security.

PNG and CNG: Pipeline Solutions and Their Limits

PNG (Piped Natural Gas) and CNG (Compressed Natural Gas) are both delivery forms of natural gas (methane), differing in end use. PNG is methane delivered at low pressure through underground pipelines to homes and commercial establishments, offering continuous, cylinder-free cooking gas. CNG is methane compressed to about 200-250 kg/cm², used primarily as automotive fuel. Both PNG and CNG are supplied from the national gas grid (fed by domestic production and LNG imports at terminals), managed by City Gas Distribution (CGD) companies regulated by the Petroleum and Natural Gas Regulatory Board (PNGRB).

The advantage of PNG over LPG is resilience: once a household is connected to a pipeline, supply is not dependent on import logistics, cylinder distribution, or refill booking. The limitation is infrastructure: CGD networks exist mainly in urban and peri-urban areas. The government's push for 3.5 lakh new PNG connections in March 2026 is emergency-accelerated infrastructure deployment that also advances India's long-term gas-based economy vision.

  • PNG composition: primarily methane (same as LNG after re-gasification).
  • Delivery pressure to homes: typically 21-100 mbar (very low pressure, safe for residential use).
  • Regulatory body: PNGRB (Petroleum and Natural Gas Regulatory Board), constituted under PNGRB Act, 2006.
  • CGD network coverage: 400+ Geographical Areas (GAs) licensed across India.
  • CNG stations in India: over 6,500+ as of 2025, primarily in metros and transport corridors.
  • India's gas-based economy target: increase natural gas share in energy mix from ~6% (2020) to 15% by 2030.

Connection to this news: The crisis has demonstrated in the most practical terms why PNG infrastructure investment is not merely a convenience upgrade but a national energy security imperative. Households with PNG connections were unaffected by the cylinder shortage — a lesson that will likely accelerate CGD licensing and rollout for years after the immediate crisis ends.

Why LPG Was Hit Harder Than Crude Oil

India managed crude oil disruptions better than LPG disruptions for a structural reason: crude oil diversification. Before the current crisis, India had already shifted a significant share of crude imports to Russia (discount pricing post-2022 sanctions), US, and African producers — reducing Hormuz dependence on crude to about 40 percent. The government confirmed that 70 percent of crude imports were being sourced from outside the Strait of Hormuz during the crisis. But for LPG, no comparable diversification had occurred — the Middle East retained a 97 percent share. Additionally, India's Strategic Petroleum Reserve (SPR) provides crude buffer (total coverage ~74 days with OMC stocks) but there is no strategic LPG reserve equivalent, making the gas supply chain more immediately vulnerable.

  • Crude from Hormuz: ~40% of India's imports (versus 90%+ for LPG).
  • SPR capacity for crude: 5.33 MMT at Vishakhapatnam, Mangaluru, Padur.
  • No equivalent strategic reserve for LPG.
  • India's crude basket price during crisis: above $156/barrel.
  • Alternative LPG sources being pursued: US (propane), non-Gulf African and South American origins.

Connection to this news: The asymmetric impact on LPG versus crude is a structural policy lesson. India's decade-long crude diversification (from 27 to 41 supplier countries) protected crude supply; the absence of equivalent LPG diversification is the gap this crisis has exposed.

Key Facts & Data

  • LPG: propane + butane mixture; stored in cylinders; used for cooking; 60% imported; 90%+ via Hormuz.
  • LNG: methane cooled to -162°C; re-gasified at terminals; India imports ~9.5-10 MMTPA from Qatar, Australia, USA.
  • PNG: methane at low pressure via pipelines; regulated by PNGRB; 3.5 lakh new connections in March 2026.
  • CNG: methane compressed to 200-250 kg/cm²; primarily for automotive use; 6,500+ stations.
  • India's domestic LPG production: ~12.8 MMT (FY25); consumption: ~31.3 MMT — gap filled by imports.
  • India's crude Hormuz dependency: ~40%; LPG Hormuz dependency: ~90%.
  • SPR covers ~9.5 days of crude; total OMC + SPR stocks cover ~74 days for crude.
  • No strategic LPG reserve exists in India.
  • India's gas share in energy mix: ~6% (target: 15% by 2030).