India urges refiners to maximize LPG output, prioritize household sector

The Indian government has directed oil refiners to boost LPG output and ensure supplies to the household sector, as the ongoing Middle East war has made it necessary to adjust refinery production, oil ministry officials said March 9.

Refiners have been instructed to maximize and ensure production of propane and butane streams to produce LPG, the officials added.

"All public sector oil marketing companies shall ensure LPG is supplied and marketed solely to consumers of domestic LPG only," the oil ministry said in a notification March 9. "All oil refining companies, including their petrochemicals complexes, shall not divert, utilize, process, crack, convert or otherwise employ any of the streams for the manufacture of petrochemical products or other such downstream derivatives."

India consumed 31.3 million metric tons of LPG in fiscal year 2024-25 (April-March), according to oil ministry data, up 5.5% from FY 2023-24.

India is the world's second-largest LPG importer, as domestic output meets only about 41% of domestic demand, petroleum ministry officials said.

The oil ministry has prioritized domestic LPG supply to households and introduced a 25-day booking period to prevent hoarding and black marketing amid current disruptions and supply constraints, the officials added.

"Non-domestic supplies from imported LPG are being prioritized to essential non-domestic sectors such as hospitals and educational institutions," the oil ministry said in a X-handle post on March 9.

India coordinating with IEA

Regarding domestic availability of other fuels, including diesel, petrol and jet fuel, a senior oil ministry official said adequate fuel stocks are available in India and ruled out any immediate fuel supply shortages.

The official also ruled out any immediate release of crude stocks from its strategic petroleum reserves or restrictions on domestic refiners' fuel exports due to the ongoing war in the Middle East region.

India's Petroleum Minister Hardeep Singh Puri said on March 7-8 that energy imports into India were continuing "in full flow from all non-Hormuz routes."

Around 52% of India's roughly 5 million barrels/day of crude imports pass through the Strait of Hormuz, with Iraq, Saudi Arabia, the UAE, Kuwait and Qatar as key Middle Eastern suppliers, S&P Global Commodities at Sea data showed. Currently, no Iranian oil flows to India.

India's SPRs currently hold about 9.5 days of net oil imports. Additionally, state-run oil companies hold storage facilities for crude oil and petroleum products for 64.5 days of total net imports, bringing the total national storage capacity of crude and petroleum products to 74 days of total net imports, according to petroleum ministry data.

IEA member countries are required to ensure oil stock levels equivalent to at least 90 days of their net imports.

In 2024, ministers from IEA member countries pledged to start discussions with India for full membership, highlighting the nation's strategic importance in tackling global energy and climate challenges. India first joined the IEA as an associate member in 2017.

IEA Executive Director Fatih Birol said in a social media post March 9 that he had a very constructive meeting with Puri. "We discussed the latest developments in energy markets amid the conflict in the Middle East and the options on the table. We agreed to continue to work together closely."