India Eyes DME Blending to Cut LPG Import Reliance

India's LPG consumption fell 13% in March 2026 to 2.379 million tonnes, driven by supply disruptions following U.S. and Israeli strikes on Iran and subsequent Iranian retaliation. The closure of the Strait of Hormuz blocked imports from Saudi Arabia and the United Arab Emirates, prompting the Government of India to curtail fuel supplies to commercial establishments and industries to protect household availability. To address the shortfall, the government directed refineries to divert feedstock from petrochemical production, raising domestic output to 1.4 million tonnes in March.

In response to these vulnerabilities, a report by EY-Parthenon and New Era Cleantech Solution Ltd suggests that blending Liquefied Petroleum Gas with 20% dimethyl ether (DME)—a fuel produced domestically via coal gasification—could reduce annual LPG imports by 6.3 million tonnes. This strategy could save India approximately Rs 34,200 crore (USD 4.04 billion) annually.

While the Bureau of Indian Standards has already notified standards permitting a 20% blend, domestic production remains limited to pilot-scale operations. New Era Cleantech Managing Director Balasaheb Darade stated that a formal blending policy is now necessary to attract the investment required to scale domestic DME production.