LPG Supply: Govt Sets New Production Rules After West Asia Crisis Disrupted Imports; What Changes

The government has set facility-wise LPG production targets for 21 refineries and upstream companies, with Reliance Industries receiving the highest allocation.

These rules have been introduced after import disruptions during the West Asia crisis exposed India's dependence on overseas cooking gas supplies.

Source : Freepik

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Key points generated by AI, verified by newsroom

• Government sets new framework, assigns domestic LPG production targets.
• Framework addresses import reliance after recent supply disruptions.
• Companies must strengthen infrastructure; government can mandate additional output.

The government has put in place a new framework to ensure higher domestic availability of cooking gas in the event of an LPG supply disruption, assigning production targets to refineries and upstream companies across the country.

Under an order issued by the Petroleum and Natural Gas Ministry on August 13, 21 refineries and upstream companies have been given maximum LPG production levels. The combined production potential covered by the schedule is 63,810 tonnes per day, reported PTI.

The prescribed limits will apply when the government determines that there is a supply constraint and additional domestic production is required.

Reliance's Jamnagar Refinery Gets 18,000-Tonne Target

Reliance Industries has received the largest individual allocation under the new framework. Its 33 million tonnes per year domestic-tariff area (DTA) refinery at Jamnagar, Gujarat, has been assigned an LPG production target of up to 18,000 tonnes per day.

The company's 35.2 million tonnes per year refinery at the same location, which is dedicated to exports, has not been assigned a target under the schedule.

Public sector refineries account for a combined 31,470 tonnes per day of the prescribed output. A total of 18 refineries owned and operated by public sector oil companies have been included in this allocation.

Nayara Energy's 20 million tonnes per year Vadinar refinery has been assigned a target of 4,480 tonnes per day. The refinery is backed by Russia's Rosneft.

Companies involved in upstream production and gas processing, including ONGC and GAIL, have been assigned a combined LPG production target of 6,460 tonnes per day.

Import Dependence Exposed During West Asia Crisis

The government's move follows the disruption to LPG supplies during the West Asia conflict, when India's reliance on imports created pressure on domestic availability.

India consumed 33.2 million tonnes of LPG in 2025-26, working out to around 91,000 tonnes per day. Domestic production during the year stood at 13.1 million tonnes, or approximately 35,900 tonnes per day. Imports made up the remaining 21.3 million tonnes, equivalent to about 58,400 tonnes per day.

Imports therefore accounted for more than 64 per cent of total LPG consumption.

The disruption was particularly significant because the Strait of Hormuz, through which India received 90 per cent of its imports from countries such as Saudi Arabia, was effectively shut after the Iran war began.

The government responded in March with emergency measures aimed at increasing domestic LPG availability. Refineries were directed to divert streams used for petrochemical production towards LPG, while supplies to industrial and commercial consumers were initially stopped and later restored gradually.

For household consumers, the interval between refill bookings was increased, and consumers were encouraged to move towards piped natural gas.

Domestic LPG production reached around 55,000 tonnes per day at the peak of the crisis. The emergency directions were gradually withdrawn after supplies improved from mid-June.

Companies Must Strengthen Storage And Transport Capacity

The latest order establishes a longer-term mechanism instead of relying only on emergency directions during a supply disruption.

Refineries and upstream oil companies have been instructed to develop and maintain sufficient infrastructure to store, evacuate and transport LPG corresponding to the quantities specified in the production schedule. This can be done either directly or through other entities, including railways and road tankers.

The ministry has also directed companies to examine technically and economically feasible ways of increasing LPG output from existing facilities.

These measures include technologies such as naphtha-to-LPG conversion and upgrades involving fluid catalytic cracking units. Companies have been asked to implement such measures where feasible to raise production beyond the minimum quantities specified in the schedule.

Any such upgrades are to be intimated to the Centre for High Technology or another authorised agency.

Govt Can Order Additional Production During Shortages

The framework also gives the central government the power to intervene when it considers additional LPG production necessary in the public interest.

The order allows the government, either directly or through the Centre for High Technology or another authorised agency, to direct oil refining companies, oil marketing companies and upstream oil companies to increase LPG production for specified quantities and periods.

Such directions may also include restrictions on alternative uses of input streams that are required for LPG production.

Once an order is issued, the concerned companies will have to raise production within the stipulated timeframe.

Production Schedule To Be Updated Twice A Year

The government will revise the LPG production schedule every six months, with updates due on January 1 and July 1 each year.

The revisions will account for production from new refineries and upstream companies as well as additional LPG output from existing facilities. Changes arising from improvements in infrastructure, production technology, evacuation, supply, transportation or distribution can also be incorporated into the schedule.