India Eyes 10-Kilogram LPG Supply Plan Amid Hormuz Crisis Impact on Imports

LPG Supply Disruptions in India: Potential Reduction in Refill Quantities

India's state-run oil marketing companies, including IOC, BPCL, and HPCL, are exploring a plan to reduce LPG refill quantities for households due to supply disruptions linked to the crisis in the Strait of Hormuz. The proposed plan involves supplying around 10 kg of LPG in standard 14.2-kg cylinders to stretch limited stocks and ensure wider distribution.

The focus is on conserving supplies while maintaining access for households. LPG imports into India, which accounts for 60% of the country's requirement, have been significantly curtailed due to the disruption. Industry data shows no fresh cargoes are currently headed to Indian shores, while only a handful of vessels managed to transit the strait last week, carrying volumes equivalent to roughly a day's national consumption.

Supply Chain Impact

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Several India-bound LPG carriers remain stranded in the Persian Gulf, awaiting clearance. A standard 14.2-kg cylinder typically lasts 35-40 days for an average household. Even a 10-kg refill could sustain usage for close to a month, allowing available volumes to be distributed more evenly during the crunch.

Market Impact

If implemented, cylinders would be labelled to reflect the reduced quantity, with prices adjusted proportionately. Companies will need to recalibrate bottling operations and may require regulatory approvals before rolling out the change. The supply squeeze has intensified as partial LPG allocations to commercial users have been restored, adding pressure on already depleted stocks.

Government Response

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Government officials, including Petroleum ministry joint secretary Sujata Sharma, have acknowledged the risks. LPG availability has been described as "worrisome," and the need for conservation has been stressed. India consumes about 93,500 tonnes of LPG daily, with households accounting for the bulk of demand. A recent drop in consumption suggests early signs of stress across sectors as supply constraints begin to ripple through the market.

Outlook

The Strait of Hormuz crisis shows no signs of easing, and industry executives warn that supply conditions could worsen over the coming weeks, forcing tougher measures to manage one of the country's most critical cooking fuel lifelines.