Following acute maritime supply disruptions caused by a three-month-long conflict in West Asia and a tightening blockade around the Strait of Hormuz, the Government of India has directed state-run Oil Marketing Companies (OMCs) to establish a standalone 30-day strategic reserve of Liquefied Petroleum Gas (LPG). This buffer will be maintained in addition to the existing 45-day rolling commercial inventory already held by fuel retailers.
While the Ministry of Petroleum and Natural Gas has confirmed that immediate domestic fuel availability remains stable supported by record LPG production of 52,000 tonnes per day the government has also deployed enforcement squads across states to prevent panic buying and retail hoarding. Public sector oil firms, including IOC, BPCL, and HPCL, are now developing long-term infrastructure strategies, ensuring prioritized household supply while regulating commercial allocations to maintain overall energy stability.
The Catalyst: Chokepoint Risks in the Strait of Hormuz
The policy shift comes amid escalating geopolitical tensions in West Asia. India, where over 33 crore households rely on LPG for cooking, remains heavily import-dependent, making energy security a critical concern. Historically, around 60% of India’s LPG requirements are imported, with nearly 90% of these shipments passing through the strategically vulnerable Strait of Hormuz.
With regional hostilities disrupting maritime traffic, the risks of over-dependence on a single chokepoint became increasingly evident. Monthly LPG imports dropped sharply from about 2.0 million tonnes pre-conflict to under 1 million tonnes. While India has developed Strategic Petroleum Reserves for crude oil, it lacked a comparable buffer system for refined LPG, exposing a structural weakness in supply resilience. The new directive aims to permanently address this gap by institutionalizing emergency storage capacity for LPG.
The Policy Directive: Building a Standalone Reserve
During an inter-ministerial review on national fuel security, Sujata Sharma, Joint Secretary in the Ministry of Petroleum and Natural Gas, stated that the government is working on strengthening energy shock resilience through strategic reserves. She noted that Oil Marketing Companies (OMCs) have been instructed to develop a plan to maintain at least 30 days of LPG reserves, and implementation work is already underway.
The responsibility has been given to state-run OMCs, IOC, BPCL, and HPCL to design and execute the required storage expansion. This proposed reserve will be separate from existing commercial stocks, with options including large above-ground tank farms and underground storage caverns, similar to facilities at Visakhapatnam and Mangaluru. The initiative represents a major shift in India’s energy security approach, moving from reactive import dependence to proactive reserve-building.
Current Inventory Health: Strengthening Domestic Supply
Despite global disruptions, the Petroleum Ministry has assured that domestic fuel availability remains secure. Domestic refineries have significantly increased output to compensate for reduced imports from traditional Gulf suppliers. LPG production has reached an all-time high of 52,000 tonnes per day, meeting nearly 70% of national demand, which has been calibrated at around 72,000 tonnes daily from a broader potential requirement of 90,000 tonnes.
In a recent four-day span, OMCs managed 1.78 crore cylinder bookings and delivered 1.8 crore cylinders to consumers. Over 96% of deliveries were verified through digital Delivery Authentication Codes (DAC), reducing leakage, diversion, and black-market activity. To ensure supply continuity, oil companies have also diversified procurement, sourcing LPG spot cargoes from countries such as the United States, Russia, Australia, Norway, Canada, and Algeria.
Managing Market Distortion and Preventing Hoarding
While LPG supply remains stable, the government has observed unusual demand patterns in the transport fuel sector. Over 150 districts reported a sudden 30% increase in petrol and diesel sales, with some agricultural regions witnessing demand doubling. Authorities clarified that this is not due to actual fuel shortages but market distortion.
Public sector OMCs have absorbed rising costs to maintain affordable fuel prices, while private retailers have increased prices significantly. This has driven consumers toward government-operated pumps, resulting in a 38% decline in private outlet sales and overcrowding at public fuel stations. To manage the situation, the government has instructed states and union territories to deploy enforcement squads under the Essential Commodities Act to curb hoarding, illegal diversion, panic buying, and black-market activities. These measures aim to stabilize distribution channels and prevent artificial shortages.
The Logical Indian’s Perspective
The government’s decision to establish a 30-day LPG strategic reserve is a timely and pragmatic step to protect households from global energy shocks. It acknowledges India’s vulnerability due to heavy dependence on imported cooking gas and exposure to geopolitical disruptions and maritime chokepoints. The situation highlights how closely connected modern energy systems are, where instability in distant regions can quickly affect essential fuel access for millions of households, especially vulnerable sections of society.
While improving storage capacity, diversifying imports, and boosting domestic production are important short- and medium-term measures, long-term energy security must go beyond defensive buffers. It requires a shift toward cleaner, domestically produced energy and reduced reliance on unstable global supply chains. Ultimately, true resilience will come from a combination of strategic reserves, international cooperation, diplomatic stability, and accelerated investment in renewable energy and green innovation to build a more stable and equitable energy future.
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VIDEO | Delhi: Joint Secretary, Ministry of Petroleum and Natural Gas, Sujata Sharma, at an inter-ministerial briefing, says, "We have sufficient stocks of petrol, diesel, and LPG. Adequate inventories of natural gas and crude oil have also been secured. All our refineries are… pic.twitter.com/BPmBxxSyy7
— Press Trust of India (@PTI_News) May 29, 2026
