India sets a 63,810-tonne daily LPG production target to shield households from global supply disruptions.
NEW DELHI: The Ministry of Petroleum and Natural Gas issued a landmark directive on August 13 establishing facility-wise maximum LPG production targets across India’s refining sector, creating a standing national capability to more than double domestic cooking gas output to 63,810 tonnes per day whenever global supply chains come under strain. This framework, spanning 21 refining and gas processing facilities, marks a forward-looking shift from crisis-response firefighting to institutionalised energy preparedness.
The policy directly responds to a real vulnerability exposed earlier this year. When conflict in West Asia disrupted shipping through the Strait of Hormuz, the route carrying nearly 90% of India’s LPG imports, the country faced a serious test of its cooking gas security. What followed offers an encouraging story of adaptability and this new framework ensures India is far better prepared next time.
A Crisis That Revealed Resilience
During the height of the disruption between March and May this year, Indian refiners rose to the occasion impressively, lifting domestic LPG output from a baseline of roughly 36,000 tonnes daily to nearly 55,000 tonnes through rapid operational adjustments, redirecting refinery streams that would normally feed petrochemical units toward household cooking gas instead. Simultaneously, state procurement agencies successfully pivoted to sourcing cargoes from the United States, demonstrating India’s ability to diversify supply chains quickly under pressure.
This experience, while financially costly for state oil marketing companies, which absorbed under-recoveries exceeding ₹59,000 crore to keep retail prices stable for households, proved something valuable: India’s refining sector has genuine flexibility to respond to shocks. The new framework simply formalises and strengthens this demonstrated capability into permanent, ready-to-activate infrastructure.
A Well-Calibrated National Buffer
What makes this policy particularly sound is its scale and design. The 63,810 tonnes per day target represents nearly 70% of India’s total daily cooking gas consumption, meaning that during a future disruption, domestic production alone could cover the vast majority of national demand, sharply reducing the country’s exposure to volatile international shipping routes. Even during a full activation, residual import needs would fall to a manageable level that alternative suppliers like the United States could comfortably fulfil.
The allocation across companies reflects a sensible mix of public and private capability. Reliance Industries’ Jamnagar domestic refinery carries the largest single allocation at 18,000 tonnes daily, leveraging its advanced catalytic cracking technology, while public sector refiners including Indian Oil, Bharat Petroleum and Hindustan Petroleum collectively contribute nearly half the national target across 18 facilities. This broad-based participation across both public and private refiners ensures the buffer isn’t concentrated in any single company’s hands, a prudent approach to national energy security.
Smart Infrastructure and Fiscal Coordination
The policy goes well beyond setting output numbers on paper. Refiners are required to build and maintain the storage, rail-loading and pipeline infrastructure needed to actually move surged production to households, addressing a critical detail that production targets alone would miss.
Equally encouraging is how the government coordinated fiscal policy alongside this mandate. Just two days after the production directive, the Finance Ministry adjusted export duties on petrol, diesel and jet fuel, helping refiners offset the margin trade-offs that come with prioritising lower-value LPG output over higher-value petrochemical feedstocks. This kind of joined-up policymaking, addressing both the operational and commercial sides of the equation together, reflects thoughtful governance.
Built to Evolve With India’s Growing Refining Capacity
The framework also includes a smart, forward-looking mechanism: mandatory six-monthly reviews every January and July to incorporate new refineries and expanded capacity as India’s energy infrastructure continues to grow. This ensures the buffer target stays current and continues strengthening over time rather than becoming a static, outdated benchmark.
A Meaningful Step for Energy Security
Taken together, this framework represents a constructive policy response to a real-world stress test. By transforming what began as emergency improvisation into a standing, well-resourced national capability, India has significantly strengthened its ability to protect households from cooking gas disruptions regardless of what happens in distant shipping lanes. Combined with parallel efforts to expand piped gas networks and diversify import sources, this LPG preparedness framework gives India considerably more control over an essential household commodity, a reassuring development for the millions of families who depend on affordable, reliable cooking gas every single day.
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