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Govt steps up LPG supply, urges calm amid Hormuz concerns

April 05, 2026 5 min read Economics International Relations GS3 (Energy Security Government Policy Economy)
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What Happened

  • The government has ramped up the sale of small 5-kg LPG cylinders — approximately 6.6 lakh bottles sold since March 23, 2026 — as part of broader steps to meet household demand amid disruption to LPG imports through the Strait of Hormuz.
  • The government has invoked special powers to direct refineries and petrochemical complexes to maximise LPG production by diverting propane and butane streams into the domestic supply pool, raising domestic LPG output by approximately 25–40%.
  • Emergency sourcing diversification is underway, with India increasing LPG procurements from the United States, Norway, Canada, and Russia (transported via the Cape of Good Hope route to bypass the Persian Gulf).
  • The government has also prioritised household (domestic) consumption over commercial use, with commercial LPG users bearing the brunt of supply constraints to protect Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries and household consumers.
  • Officials issued a public statement urging calm and warned against misleading claims about an LPG shortage, noting that output had increased by 40% and strategic buffer stocks were being drawn upon.

Static Topic Bridges

India's LPG Import Structure and Hormuz Dependence

Liquefied Petroleum Gas (LPG) — a mixture of propane and butane used predominantly as cooking fuel in Indian households — is India's most Hormuz-sensitive energy commodity. India imports approximately 60% of its LPG consumption (domestic production covers the remaining 40%). Of these imports, an estimated 90% historically transited through the Strait of Hormuz — primarily from Saudi Arabia (via Ras Tanura), Qatar, UAE, and Kuwait. India's domestic LPG production stands at approximately 1.16 million tonnes per month, while imports at peak requirement reached approximately 2.2 million tonnes per month — making imports structurally indispensable.

  • India's LPG strategic storage capacity (even after commissioning the HPCL Mangalore underground cavern in late 2025): approximately 140,000 tonnes — equivalent to roughly 5 days of national demand.
  • India has approximately 32 crore registered LPG connections, of which approximately 10 crore are under PMUY (low-income household connections).
  • Pradhan Mantri Ujjwala Yojana (PMUY), launched in May 2016 under Phase 1 and extended in 2021 as PMUY 2.0, provides subsidised LPG connections to women in Below Poverty Line (BPL) households.
  • The shift from traditional biomass cooking fuels to LPG has significant public health co-benefits: reducing indoor air pollution responsible for an estimated 600,000 deaths annually in India (WHO data).

Connection to this news: The government's decision to prioritise 5-kg household cylinders — particularly benefiting PMUY households — reflects both the social policy priority and the political sensitivity of cooking fuel availability.

India's Strategic Petroleum Reserves (SPR) and Energy Buffer Capacity

India's Strategic Petroleum Reserves, maintained by Indian Strategic Petroleum Reserves Limited (ISPRL) under the Ministry of Petroleum and Natural Gas, provide a government-controlled crude oil buffer against supply disruptions. Phase I of India's SPR comprises three underground rock cavern facilities: Visakhapatnam (Andhra Pradesh, 1.33 MMT), Mangaluru (Karnataka, 1.5 MMT), and Padur (Karnataka, 2.5 MMT) — total capacity of 5.33 MMT. As of March 2026, these reserves were at 64% capacity (~3.37 MMT), providing approximately 9.5 days of national consumption cover.

  • Phase II expansion: 6.5 MMT additional capacity approved (Chandikhol, Odisha — 4 MMT; and Padur expansion — 2.5 MMT) on PPP mode. Padur Phase II construction award: October 2025.
  • International Energy Agency (IEA) recommends member states maintain 90 days of net import cover; India's 9.5-day SPR cover is well below this benchmark.
  • In contrast, the US SPR has a capacity of approximately 714 million barrels (roughly 35 days of imports).
  • India also has some commercial crude storage in refineries (~18–22 days of crude run capacity), providing additional operational buffer.
  • The IEA's emergency oil-sharing mechanism allows member states to coordinate strategic reserve releases; India is not an IEA member but has participated as an observer and engaged in coordinated releases.

Connection to this news: The limited SPR buffer (9.5 days) explains why the government's supply-side responses — maximising domestic LPG production and emergency procurement diversification — are critical. Drawing down reserves buys days, not months.

Pradhan Mantri Ujjwala Yojana (PMUY) and Clean Cooking

The Pradhan Mantri Ujjwala Yojana, launched on May 1, 2016, in Ballia, Uttar Pradesh, is the world's largest clean cooking fuel programme. PMUY provides free LPG connections (including security deposit, stove, and first refill) to women belonging to BPL households. PMUY Phase 1 (2016–2019) targeted 5 crore connections; PMUY 2.0 (2021 onwards) extended the scheme to migrant workers, forest dwellers, and additional vulnerable categories. The scheme has been credited with dramatically improving access to clean cooking fuel — a key SDG Goal 7 (Affordable and Clean Energy) indicator — and reducing indoor air pollution.

  • PMUY launched May 1, 2016, Ballia, UP; originally targeted 5 crore connections by 2019.
  • PMUY 2.0 launched August 2021; expanded to include 9 new categories of beneficiaries.
  • As of 2026, approximately 10 crore households are PMUY beneficiaries.
  • The scheme is funded through the Ministry of Petroleum and Natural Gas; OMCs (IOC, BPCL, HPCL) implement it.
  • Subsidy mechanism: Government provides direct benefit transfer (DBT) for LPG subsidies into bank accounts of beneficiaries since the PAHAL scheme reform in 2013–14.
  • LPG coverage in India reached approximately 99.8% of households by 2022 (from 55% in 2014), largely driven by PMUY.

Connection to this news: The government's prioritisation of 5-kg cylinders and household supply during the Hormuz crisis is effectively a safeguard for PMUY beneficiaries — protecting clean cooking access for India's most vulnerable households against a geopolitical supply shock.

Key Facts & Data

  • 6.6 lakh 5-kg LPG cylinders sold since March 23, 2026, as part of ramped-up supply measures.
  • India's LPG import dependence: ~60% of domestic consumption; ~90% of imports historically through Hormuz.
  • Domestic LPG output increased by 25–40% through refinery diversion of propane/butane streams.
  • India's LPG strategic storage: ~140,000 tonnes (~5 days of demand) even after Mangaluru cavern commissioning (2025).
  • India's SPR crude capacity: 5.33 MMT (3 locations); at 64% capacity = ~3.37 MMT = ~9.5 days of consumption (March 2026).
  • PMUY: ~10 crore beneficiary households; launched May 1, 2016; extended as PMUY 2.0 in 2021.
  • Emergency LPG sourcing diversified to US, Norway, Canada, Russia (Cape of Good Hope routing).