India diversifies LPG imports and boosts domestic production to ensure energy security

Livemint - Economy · 10 Sept 2026 · 2 min read
Prelims · Economy Mains · GS3 Economy High relevance

India has reduced its LPG supply crunch by increasing imports from the US and new suppliers like Algeria and Angola, while also ramping up domestic production, ensuring stable supply for 340 million consumers.

Key points

LPG import diversification: India has shifted from 90% dependence on West Asia to sourcing 60% of its LPG imports from the US, with additional supplies from Algeria and Angola, reducing geopolitical risks.

Booking relaxation: The Union government shortened the LPG cylinder booking period from 45 days to 25 days, reflecting improved supply stability post-West Asia war disruptions.

Domestic production boost: Indian refiners increased LPG production by 28.3% (5.47 million tonnes in April-July FY27) compared to the previous year, meeting government-set targets of 63,810 tonnes per day.

Energy security strategy: The government is promoting alternative cooking sources like piped natural gas (PNG) and induction cookstoves to reduce LPG import dependence, which currently stands at 65% of annual requirements.

[GS3-Economy] The $11 billion LPG import bill for 33 million tonnes highlights India's energy import vulnerability and the need for strategic diversification to ensure macroeconomic stability.

Policy directives: The petroleum ministry mandated maximum LPG production levels for 21 refineries and upstream companies, demonstrating centralized governance in energy security planning.

Term contracts: Indian refiners signed long-term agreements with US suppliers for 10% of total imports, providing supply stability amid global market volatility.

Way Forward: India should accelerate domestic refinery capacity expansion, incentivize renewable energy-based cooking solutions, and establish strategic LPG reserves to buffer against global supply shocks.

Key terms

Piped Natural Gas (PNG)

A system delivering natural gas directly to households through pipelines as an alternative to LPG cylinders. The government's incentive scheme for PNG connections aims to reduce LPG import dependence by allocating additional domestic gas supplies to distributors for each new connection.

Strategic Petroleum Reserves (SPR)

Stockpiles of crude oil or refined products maintained by governments to buffer against supply disruptions. While India has SPRs for crude oil, the LPG supply crunch highlights the need for similar strategic reserves for cooking gas to ensure household energy security.

LPG Import Basket

The composition of countries from which India sources its liquefied petroleum gas (LPG) imports. Diversification from West Asia to the US (60% share), Algeria, and Angola enhances energy security by reducing geopolitical risks and supply chain vulnerabilities.

Energy Security

A nation's ability to ensure affordable, reliable energy supplies while minimizing dependence on external sources. For India, achieving energy security involves diversifying LPG imports, boosting domestic production (28.3% increase), and promoting alternatives like PNG and induction cookstoves.