- India has directed its state companies and private refiners to prepare for a sharp increase in cooking gas production to bolster domestic supplies amid the Iran war and uncertainty over the Strait of Hormuz, which carries about 90% of the country's LPG imports.
- Domestic refiners, which produced about 36,000 tons of LPG a day before the war, have already lifted output to as much as 54,000 tons a day, and the government now wants the industry to be capable of producing as much as 63,810 tons a day.
- Refiners and crude oil explorers have been ordered to implement all technically and economically feasible measures to maximize LPG output beyond current minimum producible levels, including exploring alternative uses of feedstocks such as converting naphtha into LPG.
- State-run explorers Oil and Natural Gas Corp. and Oil India Ltd., along with the national gas pipeline utility Gail India Ltd., have been asked to contribute about a tenth of the nationwide target.
- Refiners have been told to expand infrastructure for LPG storage, evacuation, and transportation, and will be required to raise production within stipulated timelines, with the government planning to review output targets every January and July.
India has mandated a significant increase in domestic cooking gas production to 63,810 tons per day as the ongoing Iran war disrupts traditional LPG supply routes through the Strait of Hormuz. The government aims to bolster domestic supplies, which are critical as the country relies on imports for about two-thirds of its LPG consumption.123
In a notification dated August 13, refiners and crude oil explorers were instructed to "implement all technically and economically feasible measures" to maximize LPG output. This includes exploring alternative feedstock uses, such as converting naphtha into LPG.45
Before the conflict, domestic refiners produced approximately 36,000 tons of LPG daily. However, they have already ramped up production to about 54,000 tons to meet rising demand. The government has set upper-limit production targets for individual refiners, with Reliance Industries Ltd. assigned the largest target of 18,000 tons per day.
State-run explorers like Oil and Natural Gas Corp. and Oil India Ltd., along with Gail India Ltd., are also expected to contribute to the nationwide target. Additionally, refiners have been instructed to enhance infrastructure for LPG storage, evacuation, and transportation. The government plans to review these output targets every January and July, ensuring compliance with the new production goals.678
“Buyers have turned to the US and newer suppliers including Algeria following the closure of the Strait of Hormuz,” highlighting the urgency of the situation as India seeks to secure its cooking fuel supply amidst geopolitical tensions.
“Domestic refiners have already lifted daily LPG output from 36,000 tons before the war to 54,000 tons, with state-run explorers like ONGC and Oil India asked to contribute about a tenth of the new target. The government plans to review output targets every January and July, and has ordered infrastructure expansion for storage and evacuation.”
