India Faces LPG Shortage Due to Strategic Storage Challenges

India is currently facing a significant LPG shortage, a situation exacerbated by the nation's increasing dependency on imports and insufficient strategic storage capacities. Reports suggest that the International Energy Agency (IEA) has identified the absence of extensive storage for LPG as a critical infrastructural gap. 

Increased LPG Consumption with Insufficient Storage 

The substantial rise in LPG consumption in India, notably influenced by government schemes, has surpassed the growth in strategic storage initiatives.  

India's LPG imports have tripled from 2011-12 to 2024-25, reaching 20 million tonnes, comprising 60% of the nation's requirements. Limited to operational flow, the current storage system cannot adequately cushion against supply disruptions. 

Geopolitical Tensions and Supply Disruptions 

Geopolitical tensions, such as conflicts in West Asia involving the U.S. and Iran, have further strained LPG supplies. More than 85% of India's imports transit through the Strait of Hormuz, making the country vulnerable to regional conflicts, unlike liquid fuels which have strategic reserves. 

Lack of Strategic Back-Up 

Despite LPG's centrality to domestic energy consumption, with daily usage standing at around 80,000 tonnes, strategic reserve capacity remains negligible. The only underground storage facilities in Visakhapatnam and Mangaluru account for less than 2 days of consumption, a stark contrast to the reserves maintained for crude oil and derivatives. 

The Role of Government Initiatives 

The Pradhan Mantri Ujjwala Yojana (PMUY) has played a pivotal role in the increase in LPG consumption by providing over 10 crore connections to poor households since 2017. However, while these initiatives have spiked demand, the critical component of storage capacity expansion has lagged behind. 

Read More: Government Prioritises Domestic Gas Supply for LPG, CNG and PNG Amid West Asia Conflict! 

Challenges in Expanding Underground Storage 

India's geological landscape offers both opportunities and challenges for underground storage expansion. While peninsular regions are viable, other territories face engineering constraints. Current government strategies have not prioritised expanding these facilities, exacerbating vulnerability. 

Conclusion 

India’s LPG shortage indicates a need for policy revision focusing on strategic storage capacities. Reliance on imports without adequate reserves risks vulnerability to external disruptions and impacts domestic energy security. 

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