With the situation in West Asia stabilising and shipping through the Strait of Hormuz returning to normal, the Petroleum Ministry is likely to direct oil marketing companies (OMCs) and refiners to scale back domestic LPG production to pre-crisis levels. According to sources, Indian refineries have started reducing domestic LPG production to the standard baseline of around 40,000 metric tonnes per day after operating at elevated levels during the conflict, which lasted for more than 100 days.
During the peak of the crisis, when disruptions in the Strait of Hormuz blocked shipping movement, the government had directed Indian refiners to maximise domestic LPG production to prevent a shortage of cooking gas in the country. Consequently, both public and private refiners increased output to a record 54,000 metric tonnes per day, compared with the normal production level of around 32,000 metric tonnes per day before the crisis.
The move comes after supply concerns triggered by the conflict involving Iran, Israel and the US began to ease. The Strait of Hormuz, a critical global energy transit route, handles nearly 40% of India's crude oil imports, 60% of its LNG imports and about 90% of its LPG imports.
LPG was the worst-hit fuel as India imports nearly 60% of its domestic requirement, with around 90% of those imports routed through the Strait of Hormuz from Qatar, Saudi Arabia, the UAE and Kuwait.
To address the disruption, the government increased domestic LPG production by nearly 70%, from around 32,000 metric tonnes per day to about 54,000 metric tonnes per day. India also diversified its sourcing by securing additional LPG cargoes from the US, Canada and Algeria. With a ceasefire now in place, shipping through the strategic waterway has resumed, restoring normal LPG imports.
Domestic LPG is used by around 33 crore households, including 10.58 crore beneficiaries under the Pradhan Mantri Ujjwala Yojana (PMUY), who receive subsidised cylinders. Meanwhile, India's liquefied petroleum gas (LPG) consumption declined 8% year-on-year during the first half of the current calendar year. According to the Petroleum Planning and Analysis Cell (PPAC), LPG consumption stood at around 14.74 million tonnes on a provisional basis during January-June 2026, compared with 15.95 million tonnes in the corresponding period last year.