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The ongoing geopolitical tensions in West Asia have raised concerns over disruptions in maritime trade routes, particularly through the Strait of Hormuz, a critical global energy transit corridor. For India, this development poses a significant risk to the supply of Liquefied Petroleum Gas, as a substantial portion of its imports transit through this route. In response, the Government of India has invoked emergency provisions to safeguard domestic LPG supplies for millions of households.

Government’s Emergency Measures

To mitigate potential supply disruptions, the government invoked powers under the Essential Commodities Act, 1955. The directive was issued under Section 3 of the Act and the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999.

Key provisions of the emergency directive include:

• Domestic refiners must maximise LPG production.
• Propane and butane streams are to be used exclusively for LPG manufacturing.
• Refiners are prohibited from diverting these inputs to petrochemical production.
• All LPG produced must be supplied to public sector oil marketing companies (OMCs).

The three major OMCs responsible for distribution of LPG to households are:

• Indian Oil Corporation Limited
• Bharat Petroleum Corporation Limited
• Hindustan Petroleum Corporation Limited

These companies together supply cooking gas to more than 33 crore Indian households.

India’s LPG Demand–Supply Dynamics

India’s LPG demand has increased significantly due to expanding household consumption and welfare schemes such as the Pradhan Mantri Ujjwala Yojana.

Key statistics (2024–25):

• Total LPG consumption: ~31 million tonnes
• Domestic production: ~13 million tonnes
• Import dependence: ~58%

India imports most of its LPG from West Asian suppliers, including: Saudi Arabia, United Arab Emirates, Qatar, and Kuwait

The strategic importance of the Strait of Hormuz is evident as it carries:

• ~80% of India’s LPG imports
• ~40% of crude oil imports
• More than 50% of LNG imports

Any disruption in this route therefore poses a major energy security risk for India.

Diversification of Energy Supply Sources

To reduce dependence on West Asian suppliers, India has begun diversifying import sources.

A recent agreement with the United States will supply approximately 2.2 million tonnes of LPG in 2026, accounting for around 10% of India’s annual LPG imports, sourced from the US Gulf Coast.

India is also coordinating with global commodity traders such as:

• Vitol
• Trafigura
• ADNOC Trading

These partnerships aim to secure additional energy cargoes from alternative markets.

Energy Security and Strategic Reserves

India maintains strategic petroleum reserves (SPR) to cushion against external supply shocks. Key storage facilities include:

• Visakhapatnam Strategic Petroleum Reserve
• Mangaluru Strategic Petroleum Reserve
• Padur Strategic Petroleum Reserve

Current estimates indicate:

• Crude oil stocks sufficient for about 25 days of refinery operations
• Strategic reserves covering approximately one week of national consumption
• Additional fuel stocks (petrol, diesel, LPG) sufficient for around 25 days of domestic demand

Impact on Natural Gas and LNG Supply

India’s vulnerability is more pronounced in the Liquefied Natural Gas sector, as LNG storage is technically challenging.

India is the world’s fourth-largest LNG importer. Supply disruptions have emerged as Petronet LNG Limited issued force majeure notices to its supplier QatarEnergy and domestic gas off-takers.

In case of shortages, the government may reprioritise natural gas allocation to critical sectors, including:

• City gas distribution (CNG and PNG)
• Fertiliser production
• Power generation

Challenges for India

India faces several structural challenges in ensuring energy security:

1. Limited domestic LPG production despite high refining capacity.
2. LNG storage constraints, making stockpiling difficult.
3. Price volatility in global energy markets during geopolitical crises.
4. Continued import dependence on West Asia.

Way Forward

To strengthen long-term resilience, India must adopt a multi-dimensional energy strategy:

• Diversification of imports from the US, Africa, and Latin America.
• Expansion of strategic petroleum reserves and LNG storage infrastructure.
• Enhancement of domestic exploration and refining efficiency.
• Transition toward alternative energy sources, including biogas, compressed biogas (CBG), electric cooking technologies, and green hydrogen.
• Strengthening maritime security and diplomatic coordination to protect sea lanes of communication (SLOCs).

Conclusion

The government’s decision to invoke emergency provisions reflects a proactive effort to safeguard India’s energy security during a volatile geopolitical situation. While short-term measures such as maximising domestic LPG production and diversifying imports provide immediate relief, long-term resilience will depend on energy diversification, stronger strategic reserves, and accelerated transition to cleaner fuels. Strengthening these pillars is essential to insulate India’s economy and households from future global energy shocks.