India Mandates LPG Production Boost to Offset Import Crisis

The Government of India issued an order on August 13 requiring 21 refineries and upstream companies to maximize domestic liquefied petroleum gas (LPG) production. The mandate aims to create a supply buffer after the US-Iran war closed the Strait of Hormuz, disrupting 90% of India's LPG imports.

Under the new framework, the government set a combined production target of 63,810 tonnes per day, an increase from the previous 36,000 tonnes. This target represents approximately 70% of India's daily consumption. Reliance Industries Ltd's Jamnagar DTA refinery received the largest individual quota at 18,000 tonnes per day, while 18 public sector refineries were assigned a combined 31,470 tonnes. Additional targets include 4,480 tonnes for Nayara Energy's Vadinar refinery and 6,460 tonnes for upstream producers including ONGC and GAIL.

To achieve these goals, the government requires companies to implement all technically and economically feasible measures, such as naphtha-to-LPG conversion. The state now holds the authority to mandate production ramps during supply constraints and requires firms to expand storage and transport infrastructure. To secure immediate needs, India has shifted its procurement efforts toward the United States and Algeria. The government will review these production targets every January and July.