Industry Odisha Bureau, Sep 24: India’s state-owned refiners have lifted domestic LPG production as festival season demand builds. Persian Gulf disruptions persist. Rising US cargoes are reshaping the country’s energy security map.
India’s cooking-gas supply map is being redrawn. More LPG now comes from home refineries and US cargoes. Less depends on the Persian Gulf, where renewed conflict continues to disrupt contracted supply. The shift is being tested as festival season demand arrives.
Refiners Build a Domestic LPG Buffer
State-owned refiners are producing about 44,000 tonnes of LPG a day. That is nearly 20% above August’s average, according to people familiar with the matter.
Output had been scaled back from wartime highs over the summer. Alternative cargoes from the US and Africa had eased pressure then. ADNOC also began supplying volumes through Oman’s Sohar port.
Production has now climbed again, giving refiners flexibility against import delays. The country remains the world’s second-largest LPG importer.
Festival Demand Meets a Fragile Supply Chain
Household consumption is rising as the festival season runs towards Diwali in November. Supply constraints are also easing. Rural households now wait 25 days for cylinder refills. That compares with an emergency 45-day wait imposed in March. Officials cited improved supply and lower backlogs.
Overall LPG demand, however, may stay about 10% below last year. Industrial buyers lost supply during the war, when households received priority. That industrial demand has not fully returned. Winter usually adds another lift, which could require further production increases.
Persian Gulf Disruption Keeps Supply Risk Elevated
Renewed fighting has complicated LPG transits out of the Persian Gulf. Three September cargoes from ADNOC could not be collected. One was bound for Bharat Petroleum and two for Indian Oil.
ADNOC is the only major Middle Eastern producer still supplying India. It has indicated it will supply committed October volumes. These include five cargoes for Indian Oil. BPCL and Hindustan Petroleum are due three cargoes each. Those shipments remain commitments, not completed deliveries. ADNOC said it remains committed to supporting India’s energy security.
US LPG Suppliers Reshape India’s Import Mix
The larger structural change involves US LPG suppliers. The US supplied just 6% of India’s LPG imports last year. Its share has since climbed above 20%. That makes the US India’s largest LPG supplier. The shift reduces concentration risk, though diversification is far from complete.
US Term Supply Deals Could Deepen the Shift
India signed its first US term LPG deal last year. The aim was to cut heavy dependence on the Middle East.
State refiners could now issue a tender for more US term supply. Volumes could reach as much as 20% of India’s LPG imports next year. It remains a possible tender, not a signed agreement. The figure is also separate from the US’s current import share.
Energy Security Drives India’s LPG Strategy
India is now layering its defences. Domestic output absorbs short-term shocks. US and African cargoes spread supplier risk. Term contracts and Omani port routing add further resilience. None of these removes geopolitical exposure entirely.
Household demand is rising into Diwali, while industrial consumption stays soft. Persian Gulf disruption remains unresolved. India’s LPG supply looks sturdier than in March, but not yet secure.
