Government sets LPG production targets for refiners; Reliance gets largest quota

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The government has for the first time fixed maximum cooking gas LPG production targets for individual public- and private-sector refineries and upstream companies, as it seeks to build a domestic supply buffer after the West Asia conflict exposed the country's vulnerability to disruptions in imported cooking gas.

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The Petroleum and Natural Gas Ministry, in an order issued on August 13, has specified maximum LPG production levels for 21 refineries and upstream companies, with combined production potential set at 63,810 tonnes a day -- more than double the domestic LPG output in the fiscal year ended March 31, 2026 and about 70% of the country's daily consumption.

The production limits will kick in whenever there is a supply constraint.

The lion's share of the planned output has been set from Reliance Industries Ltd's older refinery, which would have to produce up to 18,000 tonnes a day of LPG, according to the order.

India consumed 33.2 million tonnes of LPG in the 2025-26 fiscal year (about 91,000 tonnes per day). Of this, 13.1 million tonnes a year was produced locally (about 35,900 tonnes per day), while the remaining 21.3 million tonnes per annum (about 58,400 tonnes a day) was imported.

This high import dependence of over 64% left the country exposed when the start of the Iran war effectively shut the Strait of Hormuz, the narrow sea lane through which India got 90% of its imports from nations like Saudi Arabia.

With supplies impacted, the government in March ordered refineries to divert streams used for petrochemical production to maximise LPG output.

It also initially stopped sales to industrial and commercial users and thereafter gradually scaled it up. For domestic households, the frequency of booking a refill was increased, and they were encouraged to shift to piped natural gas, whose supplies were not so severely impacted due to the war.

Domestic production was ramped up to about 55,000 tonnes a day at the height of the crisis. Still, the emergency orders asking refiners to maximise output were gradually withdrawn after supplies eased from mid-June.

The new order goes further than the emergency one issued during the West Asia crisis by establishing facility-specific production benchmarks and requiring refiners and upstream companies to maintain adequate infrastructure for LPG storage, evacuation, and transportation.