LPG Shortage in India: West Asia Conflict, Import Dependence & Storage Challenges

India is facing a growing LPG cylinder shortage as disruptions linked to the ongoing West Asia conflict have strained global energy supply chains.

• The government has invoked provisions under the Essential Commodities Act, placing LPG and CNG on the priority list to prevent hoarding and stabilise supplies..

Reasons for Shortage of LPG

• Strait of Hormuz Dependence: With more than 85% of all of India’s imports having to cross the Strait of Hormuz to reach the nation’s shores and limited back-up storage, the disruption hit quickly.

• Absence of Strategic LPG Stockpiling in India: The Indian LPG system is designed for operational flow, not stockpiling.
  • Unlike in the case of auto fuels where strategic reserves of crude oil and products are equal to two months of consumption.
  • The International Energy Agency (IEA) has identified the lack of LPG storage infrastructure as a major vulnerability.
• Import Dependence: Imports constitute some 60% of India’s needs. India’s import dependency has increased from 47% in 2015 to the current levels.

• High LPG Consumption:  India’s total LPG consumption a month is some 3 million tonnes making it the second-largest consumer of LPG in the world. 
  • For Example: India’s daily LPG consumption stands at some 80,000 tonnes with more than 85% going to households.
• Expansion of LPG Access through PMUY: The Pradhan Mantri Ujjwala Yojana (PMUY) has added about 10 crore LPG connections since 2017, taking total domestic connections to 33 crore.
  • The scheme provides deposit-free LPG connections to poor women, promoting clean cooking but also increasing LPG consumption and import dependence.
• Longer Transit Time in Import from USA:  India signed an LPG import agreement with the U.S. in February for 2.2 million tonnes per year but the U.S. cargoes take some 45 days to reach India unlike the Persian Gulf cargoes.

Geological Options for Storage in India

• India can be broadly divided into three geological zones relevant for gas storage. 
  • The First Zone is the Peninsular Shield– the Archean cratonic basement of granite, gneiss and charnockite underlying about 60% of peninsular India.
  • The second zone is the Deccan Traps—the vast basaltic plateau covering some 5,00,000 square kilometers of western and central India. 
• The third zone is the salt formations of Rajasthan’s Bikaner–Barmer belt. 
• • These halite deposits can be used as cavern storage.
    

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