No More LPG Cylinder Shortages: Government Boosts Gas Production

LPG demand rises with the onset of the festive season; in response, state-owned oil companies have ramped up domestic gas production to ensure the public faces no shortages during this period.

Demand for cooking gas—or LPG—surges during the festive season. Anticipating this, state-owned oil companies have made necessary preparations. They have increased domestic LPG production—a move taken at a time when supplies were being affected by ongoing conflicts in the Persian Gulf.

According to sources, state-run refineries are currently producing approximately 44,000 tonnes of LPG daily. This is about 20% higher than the average production recorded in August.

Why is LPG demand rising?

In March, the government had extended the refill interval for LPG cylinders for rural households to 45 days. Now, with the supply situation improved, this period has been reduced back to 25 days. Additionally, the festive season has begun in the country and will continue through Diwali in November; during this time, demand for LPG for cooking and other household chores increases.

India: The World's Major Importer

India had initially ramped up domestic LPG production to manage the situation. Later, as imports began arriving from the US and Africa—and supplies commenced from Oman's Sohar port—domestic production was slightly scaled back. Now, production has been increased again due to rising demand.

India is the world's second-largest importer of LPG. Previously, India sourced a large portion of its LPG requirements from Persian Gulf countries; consequently, the conflict in that region impacted India's supply.

Demand Remains Relatively Low

However, total LPG demand this year is slightly lower compared to last year. Demand is currently about 10% lower than it was during the same period last year. A major reason for this is that the drop in industrial demand for LPG witnessed during the war has not yet fully recovered. At that time, the government had prioritized LPG supplies for domestic consumers. LPG consumption also typically rises during the winter months. Given this situation, state-owned companies may need to further increase domestic production in the near future.