- Why Petrol and Diesel Supply Remains Stable
- Why LPG Is More Vulnerable to Supply Disruptions
- Government Measures to Stabilise LPG Supply
- Recent Shipments Help Ease Immediate Pressure
- What This Crisis Reveals About India’s Energy System
- The Bottom Line
- Disclaimer
India is currently facing pressure in LPG supply due to disruptions around the Strait of Hormuz, a key global shipping route. However, despite these geopolitical tensions, the country is not experiencing shortages of petrol or diesel.
At first glance, this may seem puzzling. All these fuels originate from crude oil, so why is only LPG affected?
The answer lies in how these fuels are produced, imported, stored and distributed in India’s energy system. Petrol and diesel are largely produced domestically through India’s large refining network. LPG, on the other hand, depends much more on direct imports and has a relatively small storage buffer. Because of these structural differences, LPG supply becomes more vulnerable when global shipping routes face disruptions.
Why Petrol and Diesel Supply Remains Stable
Petrol and diesel supply remains stable in India because of the country’s strong refining infrastructure.
India operates 23 crude oil refineries with a total refining capacity of about 248–256 million tonnes per year. These refineries process over 220 million tonnes of crude oil annually, converting imported crude into fuels such as petrol, diesel and aviation fuel within the country.
Another important factor is diversification of crude oil sources. India imports crude from multiple regions rather than relying on a single supplier. This reduces the risk of supply disruptions affecting fuel availability across the country.
Additionally, crude oil inventories and refinery storage provide a buffer. Even if shipments are temporarily disrupted, refineries can continue processing stored crude oil and keep petrol pumps supplied.
Because petrol and diesel are produced domestically from imported crude oil, their supply chain is more resilient during global disruptions.
Why LPG Is More Vulnerable to Supply Disruptions
LPG behaves very differently from petrol and diesel within the energy system. Several structural factors make LPG supply more sensitive to global disruptions.
Heavy Import Dependence
India imports around 60 percent of its LPG requirement. Most of these imports come from Gulf countries, and about 90 percent of LPG shipments pass through the Strait of Hormuz.
Because of this concentration of supply routes, geopolitical tensions affecting this region can directly disrupt LPG shipments heading to India.
The Supply Gap Between Consumption and Production
The gap between LPG consumption and domestic production highlights why imports are so important.
In the first half of the year, India consumed around 16,200 thousand metric tonnes (TMT) of LPG, while domestic production stood at only 6,219 TMT. This means nearly 62 percent of the country’s LPG demand had to be met through imports.
Breaking this down further makes the dependence even clearer. India consumes roughly 2,700 TMT of LPG every month, while domestic production contributes only about 1,036 TMT. The remaining demand has to be filled through imports.
On a daily basis, LPG consumption is around 90 thousand tonnes, showing how large and continuous the demand for cooking gas is across households and businesses.
Limited Storage Capacity
Another reason LPG shortages can appear quickly is limited storage capacity.
India currently has LPG storage capacity of around 1.34 million tonnes. At the same time, the country consumes roughly 90 thousand tonnes of LPG every day.
This means the existing storage infrastructure can cover only about two weeks of national consumption. Because LPG must be stored under pressure or at very low temperatures, building large storage facilities is far more complex and expensive than storing petrol or diesel.
As a result, India’s LPG supply system relies heavily on continuous imports arriving on schedule. When shipments are disrupted, the limited storage buffer means supply pressure can emerge relatively quickly.
Government Measures to Stabilise LPG Supply
To address the supply pressure, the government announced several emergency measures.
On 8 March 2026, refineries and petrochemical complexes were directed to maximise LPG production. They were instructed to divert streams such as propane, butane, propylene and butenes towards LPG supply.
Following these measures, domestic LPG production increased by about 25 percent.
To ensure cooking gas availability for households, the government also prioritised domestic LPG supply for residential consumers. Commercial LPG supply has been restricted and is being prioritised mainly for essential services such as hospitals and educational institutions.
Recent Shipments Help Ease Immediate Pressure
There has also been some short term relief in supply. On March 15–16, 2026, two Indian flagged LPG carriers, Shivalik and Nanda Devi, successfully crossed the Strait of Hormuz carrying more than 92,000 metric tonnes of LPG to India.
These shipments help stabilise supply in the immediate term. But considering only this, it is just 5% of India’s monthly imports. At the same time, they highlight how closely India’s LPG availability is tied to uninterrupted global shipping routes.
What This Crisis Reveals About India’s Energy System
The current situation highlights several structural characteristics of India’s LPG system.
First, LPG supply depends heavily on imports from a concentrated region. Second, LPG production cannot be easily scaled up because it is largely a byproduct of refining and gas processing. Third, storage capacity is relatively limited compared with crude oil.
Over the past decade, India’s LPG demand has also grown rapidly as cooking gas access expanded across the country. While this has improved energy access for millions of households, it has also increased reliance on global LPG markets.
The Bottom Line
Petrol and diesel remain widely available in India because the country has strong refining capacity, diversified crude imports and better storage buffers.
LPG, however, relies heavily on imports that pass through a single critical shipping route. Production cannot be rapidly increased and storage capacity is limited.
Because of these structural differences, disruptions in global shipping routes can create LPG supply pressure even when petrol and diesel remain easily available.
Disclaimer
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