India’s LPG Output Boost May Cover Only Half of Demand Amid Supply Disruptions

India’s efforts to increase domestic production of liquefied petroleum gas (LPG) may provide only limited relief as the country faces supply disruptions linked to escalating tensions in West Asia.

Oil refiners have begun optimising LPG output by diverting feedstock away from petrochemical production and toward LPG recovery. However, industry analysts say the move can only provide a modest increase in supply and will not significantly reduce India’s dependence on imports.

Domestic output still insufficient

India relies heavily on overseas LPG shipments, with imports accounting for nearly 90 percent of supply.

According to Sumit Ritolia, lead research analyst for refining and modelling at Kpler, even if refineries manage to increase LPG production by 10–20 percent above current levels, domestic output would only meet around 47–50 percent of total demand.

This would still leave a substantial supply gap that must be filled through imports.

Currently, India consumes nearly one million barrels per day of LPG. Of this, only 40–45 percent is produced domestically, while 55–60 percent is imported from overseas suppliers.

Government pushes for higher production

Indian refiners have already increased LPG production by about 25 percent after the government directed companies to boost domestic output under the Essential Commodities Act, 1955.

The directive was issued as the conflict in West Asia raised concerns about energy supply disruptions for India.

However, supply chains remain highly vulnerable. Around 80–90 percent of India’s LPG imports pass through the Strait of Hormuz, a critical maritime route that has been affected by regional tensions.

Analysts say sourcing LPG from suppliers outside the Middle East is possible, but longer shipping routes mean replacement cargoes would take significantly more time to reach India.

Government urges calm amid shortages

Amid reports of LPG shortages in some areas, the Ministry of Petroleum and Natural Gas has urged citizens not to engage in panic buying and advised consumers to use cooking gas responsibly.

During a press briefing, Sujata Sharma, Joint Secretary in the ministry, said the government has absorbed a portion of the increased costs caused by the global crisis to shield consumers from major price spikes.

Officials also confirmed that India is securing LPG supplies from several global energy companies, including UAE-based ADNOC and Algeria’s Sonatrach, among others.

Crude oil supply remains stable

Despite concerns about LPG availability, analysts say India’s crude oil and refined petroleum product supplies remain relatively stable.

In March, India was expected to import around 2.6 million barrels of crude oil per day through the Strait of Hormuz. At the same time, imports from Russia have increased significantly.

Data from vessel tracking firm Kpler shows that additional Russian crude shipments could reach 1 to 1.2 million barrels per day during the month.

This diversification has helped reduce the potential supply gap from disruptions in the Hormuz region.

Refined product exports remain strong

India also continues to benefit from its position as one of the world’s largest exporters of refined petroleum products.

In 2025, the country’s net refined product exports averaged around 1.1 million barrels per day, helping maintain stable supply for domestic markets.

Government officials said international demand for India’s refined petroleum products remains strong, and there are currently no plans to halt exports.

While crude supply risks can be partially managed through diversified sourcing and increased Russian imports, analysts say LPG availability will remain the key factor to watch in the coming weeks as geopolitical tensions continue to impact energy markets.