India's Gas Demand Persists Despite 50% Increase in Domestic Output

India's LPG Demand Remains Unsustainable

Key Findings:

• India's domestic LPG demand is projected to reach 2.9 million tonnes per month in FY27, up from 1.28 million tonnes in FY26.
• Even with a 30% increase in LPG output, India would still require 1.56 million tonnes of imports per month, indicating a structural dependence on imports.
• Under a 50% increase scenario, imports would remain above 1.34 million tonnes per month, highlighting the country's elevated dependence on imported LPG.

LPG Consumption and Production Trends:

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• Monthly LPG consumption has increased significantly from 535,000 tonnes in 1998-99 to 3.13 million tonnes in 2024-25, driven by rising household penetration and clean cooking initiatives.
• In contrast, LPG production has grown much more slowly, from 360,000 tonnes to 1.28 million tonnes over the same period.

Import Trends and Geopolitical Risks:

• India's LPG import basket is highly concentrated in West Asia, with the UAE, Qatar, Saudi Arabia, and Kuwait being the top suppliers in 2024.
• The country's exposure to geopolitical risks in the region is a concern, and alternative sources such as the US, Canada, and Algeria will be tapped to mitigate this risk.

Supply Disruption Impact:

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• Urban centres, such as Chandigarh and Delhi, may feel the impact of a prolonged supply disruption more acutely, with cylinder utilisation rates of 19 and 21 days, respectively, compared to the national average of 30 days.
• The government has set a cap of 25 days for refills in urban areas and 45 days in rural areas to ensure a more balanced distribution of LPG supplies.