Ensuring LPG Supply Amid the West Asia Crisis | 2026

Описание: Ensuring LPG Supply Amid the West Asia Crisis

Ensuring Liquefied Petroleum Gas (LPG) Supply Amid West Asia Crisis

The ongoing conflict in West Asia has raised concerns about disruptions in maritime movement through the Strait of Hormuz, a critical global energy chokepoint. Since over 80% of India’s LPG imports pass through this route, the Government of India has taken emergency measures to ensure uninterrupted cooking gas supply for more than 33 crore households.

The government has invoked provisions under the Essential Commodities Act, 1955 and directed oil refiners to maximise LPG production and prioritise domestic consumption.

Government’s Emergency Directive

Invoking Emergency Provisions

Directive issued under Section 3 of the Essential Commodities Act, 1955.
Also relies on provisions of the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999.
These laws allow the government to regulate production, storage, and distribution of essential commodities during emergencies.

Key Provisions of the Order

Oil refining companies must maximise LPG production.
Propane and butane streams must be used exclusively for LPG manufacturing.
Diversion of these streams for petrochemical production is prohibited.
All LPG produced must be supplied to public sector Oil Marketing Companies (OMCs).

Role of Oil Marketing Companies

Major public sector OMCs supplying LPG:

Indian Oil Corporation
Bharat Petroleum Corporation Limited
Hindustan Petroleum Corporation Limited
These companies supply the majority of domestic LPG for Indian households.

India’s LPG Demand–Supply Dynamics

High Import Dependence

India consumed 31 million tonnes of LPG in 2024–25.
Domestic production contributed only 13 million tonnes, resulting in 58% import dependence.
Any disruption in shipping through the Strait of Hormuz poses a major supply risk.

Major Sources of LPG Imports

India imports LPG from Saudi Arabia, UAE, Qatar, and Kuwait.

Strategic Importance of the Strait of Hormuz

Approximately 80% of LPG, 40% of crude oil, and over 50% of LNG imports pass through the strait.
Any disruption poses serious energy security risks.

Diversifying Energy Supply Sources

LPG Import Agreement with the United States

India signed an agreement to import 2.2 million tonnes of LPG in 2026, about 10% of annual imports.
Supplies will come from the US Gulf Coast, reducing dependence on West Asia.

Engagement with Global Energy Traders

India is coordinating with companies such as Vitol, Trafigura, and ADNOC Trading.
Objective: Secure additional crude oil and LPG from alternative markets.

Energy Security and Strategic Reserves

Current Fuel and Oil Stocks

Crude oil stocks with refiners last about 25 days.
Stocks are replenished through non-Hormuz supply routes.
Emergency reserves through Strategic Petroleum Reserves support roughly one additional week of oil consumption.

Strategic Petroleum Reserve Facilities

Locations: Visakhapatnam, Mangaluru, and Padur.
Serve as a buffer against external energy shocks.

Impact on Natural Gas and LNG Supply

Vulnerability in LNG Supply

India is the 4th-largest LNG importer.
LNG stockpiling is limited due to storage constraints, increasing vulnerability.

Supply Disruptions and Industry Response

Petronet LNG Limited issued force majeure notices.
QatarEnergy indicated potential production disruptions.

Domestic Gas Allocation

Prioritised sectors: City gas (PNG & CNG), fertilisers, power.
Government may reprioritise allocations in case of shortages.

Challenges for India

Limited domestic LPG production despite refining capacity.
LNG storage infrastructure is insufficient.
Global conflicts can trigger price volatility, affecting subsidies and fiscal stability.

Way Forward

Diversification of Energy Sources

Expand LPG imports from the US, Africa, and Latin America.

Expansion of Strategic Reserves

Increase Strategic Petroleum Reserves and develop LNG storage facilities.

Boosting Domestic Production

Enhance domestic gas exploration and refining efficiency.

Energy Transition

Promote electric cooking, biogas, compressed biogas, and green hydrogen.

International Cooperation

Strengthen maritime security and diplomatic coordination for safe sea lanes of communication.

Conclusion

Invoking emergency provisions is a proactive step to safeguard energy security and household LPG supply.
Short-term measures like maximising production and diversifying imports provide immediate relief.
Long-term resilience requires energy diversification, stronger strategic reserves, and adoption of alternative fuels.
These steps will protect India’s economy and citizens from future global energy shocks.