India Ramps Up LPG Output, But Fuel Price Pressure Builds Amid West Asia Crisis

The Centre on Tuesday sought to calm concerns over fuel availability amid the continuing conflict in West Asia, with Union Petroleum and Natural Gas Minister Hardeep Singh Puri saying India has sufficient crude oil, LNG and LPG stocks and has sharply increased domestic LPG production to protect household supplies.

Speaking at the CII Annual Business Summit , Puri said there was no immediate fuel supply issue and that domestic LPG production had been raised from around 35,000–36,000 tonnes per day to 54,000 tonnes per day . He said India currently has around 69 days of crude oil and LNG stocks and 45 days of LPG stocks , giving the country a cushion against short-term disruptions.

The numbers are significant because India’s normal LPG consumption is estimated at about 90,000 tonnes per day . At the newly ramped-up production level of 54,000 tonnes per day , domestic refineries and gas-processing facilities can meet roughly 60 per cent of normal daily demand . If consumption is moderated during the crisis, domestic output could cover nearly 70 per cent or more of daily requirement, reducing the risk of a severe cooking gas disruption.

However, India is still not fully self-sufficient in LPG. The remaining requirement continues to be met through imports and stock drawdowns. A large part of India’s imported LPG comes from countries such as Qatar, Saudi Arabia and the UAE , where LPG is often obtained by separating propane and butane from natural gas liquids . In India, much of the emergency ramp-up comes from refineries processing crude oil and extracting LPG as one of the lighter petroleum products.

Energy analysts say this distinction matters. If imported LPG flows normally, Indian refineries can focus more on producing petrol, diesel, aviation turbine fuel, naphtha and other petroleum products. But when LPG imports are disrupted, refineries can be pushed to maximise LPG output, though only within technical limits and sometimes at the expense of other refinery products.

Puri also described Prime Minister Narendra Modi’s recent appeal for fuel conservation as a “wake-up call”. Addressing a BJP rally in Hyderabad on Sunday, Modi had urged people to use fuel judiciously, shift to public transport, carpool, use electric vehicles, work from home where possible, and postpone gold purchases and foreign travel for a year to conserve foreign exchange.

The appeal is not merely about cooking gas availability. India imports a large share of its crude oil requirement, and a prolonged West Asia conflict could push up global oil prices, raise freight and insurance costs, and strain the finances of oil marketing companies if retail prices remain unchanged.

While the government maintains that there is no immediate shortage of petrol, diesel or LPG, the larger economic pressure is becoming harder to ignore. If global crude and LPG prices stay elevated, analysts say the Centre may eventually have to allow increases in petrol, diesel and LPG prices , or compensate oil companies through subsidies and under-recoveries. Otherwise, the burden could deepen losses for oil marketing companies or widen the fiscal deficit.

For now, the government’s message is two-fold: household LPG supplies are being protected through higher domestic production and available stocks, but citizens must conserve fuel because India’s broader energy import bill remains vulnerable to any prolonged disruption in West Asia.