Why is India staring at LPG shortage?

With LPG shortage hitting day-to-day life in India, data suggest while the nation opted for a dramatic surge in LPG use, especially among poor households, driven by imports there was a no plan to boost long-term, strategic LPG reserves in parallel.

With LPG shortage hitting day-to-day life in India, data suggest while the nation opted for a dramatic surge in LPG use, especially among poor households, driven by imports there was no plan to boost long-term, strategic LPG reserves in parallel.

With more than 85% of all of India’s imports having to cross Strait of Hormuz to reach the nation’s shores and limited back-up storage, the disruption has hit quickly unlike in the case of auto fuel where strategic reserves of crude oil and products are equal to two months of consumption.

The Indian LPG system is designed for operational flow, not stockpiling. And there are no concrete proposals currently to increase large underground storage either.

The International Energy Agency (IEA) has flagged the lack of such storage as an infrastructural weakness in India.

IEA figures show that India’s LPG imports increased threefold from 2011-12 to 2024-25 to some 20 million tonne. Imports constitute some 60% of India’s needs. India’s import dependency has increased from 47% in 2015 to the current levels.

This year, imports had crossed 18 million tonne in January. India’s total LPG consumption a month is some 3 million tonne making it the second-largest consumer of LPG in the world. But, the total storage capacity can feed less than half of that monthly requirement and almost all of it in tanks at import terminals such as Ennore.