India Boosts LPG Output Amid Hormuz Strait Uncertainty

India is preparing for a substantial increase in its domestic liquefied petroleum gas (LPG) production. This strategic shift aims to lessen the nation’s reliance on imports, particularly as uncertainty persists around the critical Strait of Hormuz.

Government Mandates Production Maximization

On August 13, 2026, the Indian government issued a directive to refiners and crude oil explorers. They are instructed to implement all technically and economically feasible measures to maximize LPG output beyond current minimum levels.

• Daily LPG production before the war: 36,000 tons
• Daily LPG production after the war: 54,000 tons
• New industry target for daily production: 63,810 tons
• Largest individual target for Reliance Industries Ltd.‘s domestic unit: 18,000 tons per day

Strategic Initiatives for Enhanced Output

The directive includes exploring alternative feedstocks, such as converting naphtha into LPG, to augment supply. State-run explorers like Oil and Natural Gas Corp., Oil India Ltd., and Gail India Ltd. are also expected to contribute significantly to this national goal.

India typically depends on imports for approximately two-thirds of its total LPG consumption. The ongoing US-Iran war has exacerbated concerns over the Strait of Hormuz, which handles about 90% of India’s LPG imports.

Addressing Supply Chain Vulnerabilities

Historically, domestic LPG production was less favored than imports due to its lower profitability compared to gasoline and petrochemical feedstocks. To secure supply, India has actively sought alternative routes and suppliers, including the US and Algeria.

Refiners have also received instructions to expand their infrastructure for LPG storage, evacuation, and transportation. The government plans to review these ambitious output targets on a bi-annual basis.