Centre directs fuel companies to build 30-day LPG strategic reserves amid Hormuz disruption

New Delhi: As the West Asia conflict squeezes fuel supply, the Centre has asked public sector oil marketing companies (OMCs) — Indian Oil, Bharat Petroleum, and Hindustan Petroleum — to create additional LPG reserves equivalent to at least 30 days of demand, beyond their regular commercial stocks.

“Oil-marketing companies have been asked to work out [such that] they have a minimum of thirty days for reserves for LPG, and they are working on it,” Petroleum Ministry Joint Secretary Sujata Sharma told reporters on Friday.

She added that the OMCs have also been directed to expand reserves for crude oil. LPG, used as a cooking fuel by over 33 crore Indian households, has been the hardest-hit energy segment due to the ongoing West Asia conflict and near-closure of the Strait of Hormuz.

India currently has no strategic reserves for LPG or LNG, unlike its strategic petroleum reserves for crude oil.

India meets about 60 per cent of its LPG consumption through imports, with roughly 90 per cent of those imports traditionally routed through the Strait of Hormuz — translating to around 54 per cent of total LPG consumption.

The chokepoint has also accounted for 55-60 per cent of LNG imports and about 40 per cent of crude oil shipments. Current daily LPG demand stands at approximately 72,000 tonnes, with domestic refineries producing 50,000–52,000 tonnes per day — covering around 70 per cent of needs, up from 40 per cent before the war.

Domestic production has been maximised to offset import shortfalls, while OMCs are sourcing cargoes from alternative regions including the US, Australia, and Russia.

Prior to the conflict, India’s LPG consumption averaged about 90,000 tonnes per day. Following the disruption and seasonal factors, it has fallen to 72,000 tonnes.

The government has implemented demand management measures, including rationing supplies to industrial and commercial users to prioritise household needs, and increasing the minimum gap between household refill bookings.

The move comes as the West Asia war has exposed vulnerabilities in India’s energy supply chain, with vessel movements through the Strait of Hormuz reduced to a trickle and supply tightness for LPG likely to persist.