What Happened
- India is considering the creation of a 30-day strategic reserve for Liquefied Petroleum Gas (LPG) to reduce vulnerability to supply disruptions from West Asia, particularly through the Strait of Hormuz, which has been threatened by the Iran war in early 2026.
- India already has two operational underground LPG caverns: an 80,000-tonne rock cavern in Mangalore (India's largest single LPG storage facility) and a 60,000-tonne cavern in Visakhapatnam — together totalling approximately 1,40,000 tonnes of deep underground LPG storage.
- The existing LPG cavern capacity represents less than 2 days of India's national LPG consumption — vastly insufficient as a strategic buffer.
- Building a 30-day strategic LPG reserve is estimated to cost around ₹9,607.5 crore, and involves significant engineering challenges due to LPG's pressurised liquid state.
- The proposal gains urgency as approximately 90% of India's LPG imports — which meet about 60% of domestic consumption — transit through the Strait of Hormuz, making India highly exposed to any closure or disruption of the strait.
Static Topic Bridges
India's Strategic Petroleum Reserve (SPR) — Existing Framework and Gap
India's Strategic Petroleum Reserve (SPR) programme was designed to store crude oil for emergency use. It is managed by Indian Strategic Petroleum Reserves Limited (ISPRL), incorporated in 2004 as a special purpose vehicle under the Ministry of Petroleum and Natural Gas, and a wholly owned subsidiary of Indian Oil Corporation (IOC).
- Phase I SPR locations and capacities (crude oil): Visakhapatnam (1.33 MMT), Mangalore (1.5 MMT), Padur/Udupi (2.5 MMT) — total 5.33 MMT (about 9.5 days of consumption).
- Current fill level: ~64% of total capacity (as reported in March 2026).
- Phase II expansion approved (July 2021): Chandikhol, Odisha (4 MMT) and expanded Padur (2.5 MMT) — total 6.5 MMT additional capacity.
- India's crude SPR gives about 9.5 days of consumption cover — compared to the IEA standard of 90 days for member nations.
- Unlike crude oil, there is NO equivalent national strategic reserve system for LPG or LNG in India.
Connection to this news: The LPG strategic reserve proposal addresses a critical gap in India's energy security architecture — the SPR covers crude oil, but the downstream LPG supply chain has no buffer, making cooking fuel supply vulnerable to geopolitical shocks.
LPG in India — Demand, Supply, and Pradhan Mantri Ujjwala Yojana (PMUY)
LPG (Liquefied Petroleum Gas — primarily propane and butane) is India's dominant cooking fuel, supplied through a network of public sector oil marketing companies (HPCL, BPCL, IOCL). India's LPG consumption has surged following the Pradhan Mantri Ujjwala Yojana (PMUY), which expanded access to clean cooking fuel for below-poverty-line households.
- PMUY was launched in May 2016; by 2026, over 10 crore LPG connections have been provided to BPL households.
- India imports approximately 60% of its LPG consumption requirement; domestic production is insufficient to meet demand.
- India is the world's second-largest LPG consumer (after China).
- ~90% of India's LPG imports transit the Strait of Hormuz, largely from Gulf producers (Qatar, Saudi Arabia, UAE).
- LPG prices in India are regulated/controlled; domestic prices are partially subsidised for PMUY beneficiaries.
Connection to this news: The Ujjwala Yojana's success in making LPG a household staple for over 10 crore poor families has dramatically raised the social and political stakes of any LPG supply disruption — strengthening the case for a strategic reserve.
Energy Security — Concepts, International Standards, and India's Vulnerabilities
Energy security refers to the uninterrupted availability of energy sources at an affordable price. The International Energy Agency (IEA) defines it in terms of the "4 As": Availability, Accessibility, Affordability, and Acceptability. For oil, the IEA mandates 90 days of strategic reserves for member states as a standard.
- India is not an IEA member (it is an IEA Associate Country since 2017 under a roadmap toward full membership), so it is not formally bound by the 90-day reserve standard.
- India's crude oil import dependence: ~87–90% of consumption; oil import bill constitutes a major source of current account deficit pressure.
- Key energy chokepoints for India: Strait of Hormuz (oil, LPG, LNG), Strait of Malacca (coal, oil from Southeast Asia), Red Sea/Suez Canal (trade routes to Europe).
- India has also faced vulnerability in coal supply (due to port infrastructure) and natural gas (limited LNG regasification capacity).
Connection to this news: The 30-day LPG reserve proposal is India's attempt to move toward IEA-equivalent energy security standards for cooking fuel — recognising that the Strait of Hormuz vulnerability affects LPG disproportionately more than crude.
Underground Cavern Storage — Technology and Engineering Context
Underground cavern storage for energy is a proven technology used globally for crude oil, LPG, and natural gas. India has invested in rock cavern construction for both the crude oil SPR and LPG storage. Rock caverns maintain stable pressure and temperature conditions, making them suitable for pressurised liquid storage.
- Mangalore LPG Cavern (HPCL): 80,000 metric tonnes capacity; India's largest single underground LPG storage facility, commissioned in late 2025.
- Visakhapatnam LPG Cavern: 60,000 metric tonnes capacity.
- LPG storage is technically more complex than crude oil because LPG is stored as a pressurised liquid; maintaining structural integrity requires higher engineering precision.
- A 30-day LPG reserve at India's current consumption levels would require capacity far exceeding current cavern infrastructure — estimated cost: ~₹9,607.5 crore.
Connection to this news: The existing Mangalore and Visakhapatnam LPG caverns, though operationally significant, provide less than 2 days of cover — highlighting the infrastructure gap that a 30-day reserve policy would need to bridge, requiring major new capital investment.
Key Facts & Data
- Existing LPG cavern capacity: 80,000 MT (Mangalore) + 60,000 MT (Visakhapatnam) = ~1,40,000 MT total (< 2 days consumption).
- Proposed 30-day LPG strategic reserve estimated cost: ~₹9,607.5 crore.
- India imports ~60% of its LPG consumption; ~90% of these imports transit the Strait of Hormuz.
- India is the world's second-largest LPG consumer (after China).
- Crude oil SPR: 5.33 MMT across Visakhapatnam, Mangalore, Padur (~9.5 days of consumption); ~64% filled.
- PMUY: 10+ crore LPG connections to BPL households (since May 2016).
- ISPRL manages crude SPR; incorporated 2004 as subsidiary of IOC under Ministry of Petroleum and Natural Gas.
- Phase II SPR expansion: Chandikhol (4 MMT, Odisha) and Padur (2.5 MMT, Karnataka), approved July 2021.