India Mandates 30-Day LPG Buffer To Secure Supply

Key Insights 

1. Joint Secretary at the Ministry of Petroleum and Natural Gas, the government has asked the state-owned oil marketing firms to increase their buffer capacity of LPG to fulfil at least a 30-day requirement of the country.
    
2. Around 60% of LPG consumed in India is imported, out of which 90% passes through the Strait of Hormuz, the passage to which has been disrupted owing to the conflicts in West Asia.

India Creates LPG Barrier to Insulate against West Asian Disruptions

India's administration is taking bold action to secure its supply of energy. 

Joint Secretary Sujata Sharma said at an inter-ministerial media briefing that India is looking at increasing the storage capacity of crude oil.

When securing its fuel supply through the means of strategic reserves, and making sure there are no disruptions in fuel supply. 

The new 30-day reserve will come into play along with the 45-day rolling commercial reserve already in place in fuel retailers, IOC, BPCL, and HPCL. It is a significant move on behalf of India’s energy defence strategy. 

There is going to be a greater shortage of LPG compared to crude oil and natural gas because the country's dependence on imports is from West Asia.

The majority of 90% of LPG imports transit via the Strait of Hormuz, which is now being disrupted. 

The country is left vulnerable to geopolitical risks owing to its sole dependence on one chokepoint in the long run.

The Supply Scenario in Numbers

To comprehend the magnitude of India’s exposure to LPG, we must understand the numbers involved. The table below shows important supply statistics that have influenced India’s emergency response.

Refineries are now operating at optimum levels, and LPG production has reached an all-time high of around 52,000 tonnes per day. 

Yet domestic production alone cannot plug the import gap. The 30-day reserve is designed to buy time if import routes tighten further.

310 Million Households are Watching the Gas Gauge

For common Indians, this policy is more than just economics; it is their day-to-day life. 

Almost 60% of Indian households depend on LPG as a source of energy to cook food at home, according to a recent report. 

This shift towards LPG usage in households has been primarily due to the Pradhan Mantri Ujjwala Yojana introduced by the Indian government. 

In essence, a disruption in supplies does not remain limited to the port; in four days' time, it becomes a reality in the kitchen itself.

Within Four Days, 1.78 Crore LPG Refill Bookings were registered, with 1.8 Crore Cylinders being delivered – Almost 96% of These Deliveries Have Been Digitally Verified. 

High Levels of Demand Mean that the Policy Introduced by the Government is Directly Safeguarding Some of the Most Vulnerable Households from being Unable to Cook During an Extended Period of Crisis. 

Analysts Agree That Reserve Policy Makes Sense – But Not Enough

The government's action has drawn praise, although with a few caveats, from analysts. 

India is trying to achieve a diverse source of imports of LPG, prioritising the domestic refinery, engaging in diplomacy with other countries to procure more LPG, and using coal and kerosene as an alternative fuel in places such as restaurants.

Expansion of piped natural gas networks, biogas technology usage, and electric induction cook stoves are all technologies that could decrease household vulnerability to the disruptions in LPG import. 

When each of these comes with specific requirements of infrastructure investment, the supply crisis of 2026 is giving ample arguments for their accelerated usage.

Conclusion

Building reserves for at least 30 days seems to be a very wise step under the current energy market situation. Yet, the challenge for the Indian government remains that it needs to find ways to reduce its dependency on LPG imports structurally.

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