India's LPG Supply Model: High Import Dependence and Household Vulnerability
India faces significant strategic vulnerability in its LPG supply, with 60% imported and domestic production meeting only 40% of demand. Annual LPG imports are 150% of domestic output. This is critical because LPG is primarily a household fuel, making its supply hard to defer or replace. The Strait of Hormuz is a key transit route, adding geopolitical risk. Unlike Japan, which has alternatives and significant storage, India's storage is minimal (1.5 days of national demand in deep storage). The global exportable LPG pool is also heavily claimed by a few Asian buyers, intensifying market tightness during disruptions.
Key Points
- India's LPG demand significantly outstrips domestic production, leading to high import dependence.
- The overwhelming use of LPG as a household fuel makes India's supply model highly vulnerable to disruptions.
- Limited strategic storage and reliance on a single transit corridor (Strait of Hormuz) exacerbate the risk.
- Global LPG markets are tight, with major Asian buyers already claiming a large share of the exportable pool.
- Solutions include prioritizing domestic LPG for households, building deeper strategic reserves, and promoting electric cooking.
Exam Facts
- India consumed about 33.15 million tonnes of LPG last year.
- Domestic production met only about 40% of India's LPG demand.
- Annual LPG imports are equal to about 150% of domestic LPG output.
- India's visible underground cavern-based deep storage is about 140,000 tonnes (1.5 days of national demand).
- About 90% of India's LPG imports normally transit the Strait of Hormuz.
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