India Sets LPG Production Targets for Refineries

The Indian government has, for the first time, established facility-specific targets for LPG production across 21 public and private sector refineries and upstream companies. This strategic initiative aims to bolster domestic supply, lessen reliance on imports, and guarantee cooking gas availability, especially during potential future disruptions.

A New Framework for Domestic LPG

The Ministry of Petroleum and Natural Gas issued an order on August 13, setting maximum LPG production levels. These targets collectively amount to 63,810 tonnes per day.

This capacity is more than double India’s domestic LPG production in FY26. It also covers nearly 70% of the country’s average daily consumption.

Reliance Industries’ Jamnagar refinery, which serves the domestic market, has been assigned the largest individual target of 18,000 tonnes per day.

Addressing Import Vulnerabilities

The decision was prompted by significant supply chain issues experienced during the West Asia conflict. These events underscored India’s substantial dependence on imported LPG.

In FY26, India consumed approximately 33.2 million tonnes of LPG, with over 64% met through imports. The Strait of Hormuz, a critical route, handles about 90% of India’s LPG imports.

During a supply crunch in March, the government implemented emergency measures. These included diverting petrochemical streams to LPG production, restricting supplies to industrial and commercial consumers, and increasing household refill booking intervals. Such actions temporarily boosted domestic LPG production to around 55,000 tonnes per day.

Operational Directives for Refineries

The new framework is designed as a permanent solution, requiring refineries and upstream companies to maintain adequate infrastructure for LPG storage, transport, and evacuation. They are also encouraged to explore methods to increase output.

Public sector oil companies’ 18 refineries have a combined target of 31,470 tonnes per day. Nayara Energy’s Vadinar refinery has a target of 4,480 tonnes per day.

Upstream producers like ONGC and GAIL are collectively targeted for 6,460 tonnes per day. The government retains the authority to mandate increased LPG production and restrict alternative uses of input streams if necessary.

Refineries are encouraged to explore methods such as converting naphtha to LPG and upgrading fluid catalytic cracking units to enhance output.

Future Reviews and Enhanced Control

The government plans to review and update the production schedule biannually. These reviews will occur on January 1 and July 1 to incorporate new capacities and infrastructure improvements.

This framework aims to enhance government control over domestic LPG availability. It also seeks to reduce the nation’s vulnerability to global import fluctuations, marking a significant step towards energy security.