India has set a 63,810-tonne daily maximum LPG production target for 21 refineries and upstream companies, creating a new mechanism to boost domestic cooking-gas supplies whenever imports are disrupted.
The move follows the severe LPG supply shock triggered by the West Asia conflict in 2026. It also highlights a structural problem: India consumed 33.2 million tonnes of LPG in FY2025-26, but produced only 13.1 million tonnes domestically, leaving more than 64% of consumption dependent on imports.
Government Sets Production Targets
The Petroleum and Natural Gas Ministry issued the order on August 13, 2026, specifying maximum LPG production levels for 21 public- and private-sector refineries and upstream companies. Their combined production potential under the order is 63,810 tonnes a day.
The figure should not be interpreted as India’s current daily production. The targets are designed to apply when there is a supply constraint, giving the government a standing mechanism to require higher output when imported LPG becomes difficult to secure. The government plans to revise the targets every January and July to reflect additional production capacity and changes at existing facilities.
Reliance Industries has received the largest individual target. Its older, domestic-market-focused refinery has been assigned a maximum LPG production level of 18,000 tonnes per day.
India Still Relies On Imports
The scale of the intervention becomes clearer when compared with India’s actual LPG balance.
In FY2025-26, India consumed 33.2 million tonnes of LPG. Domestic production was approximately 13.1 million tonnes, while imports supplied another 21.3 million tonnes. On that basis, imports accounted for more than 64% of consumption.
Domestic production during the crisis had already been pushed considerably higher. Business Standard reported that output reached around 55,000 tonnes a day, compared with an FY2025-26 average of roughly 35,900 tonnes a day.
The new targets therefore represent a further potential increase in domestic supply during periods of stress. But even the 63,810-tonne daily target would cover only about 70% of FY2025-26’s average daily consumption of roughly 91,000 tonnes.
That gap explains why higher refinery output can strengthen supply security without eliminating India’s need for imports.
Middle East Exposure Has Shifted
The crisis exposed another vulnerability: where those imports come from.
Before the conflict disrupted supplies, around 90% of India’s LPG imports came from the Middle East, according to Reuters. CRISIL Intelligence similarly described India’s pre-conflict LPG sourcing as highly concentrated among Gulf suppliers.
But the sourcing mix has already started changing. CRISIL reported that the US accounted for nearly one-third of India’s LPG import volume in April 2026, compared with just 8% in February. India also sourced cargoes from countries including Argentina, Chile, France and the Netherlands.
Reuters reported in July that Indian state-run refiners were planning to source up to 25% of their LPG imports from the US in 2027.
That diversification matters because import dependence is not only about how much LPG India buys overseas, but also how concentrated its supply routes and suppliers are.
What Changes For Consumers
For households, the immediate significance of the new policy is greater resilience rather than guaranteed lower prices.
LPG remains exposed to international prices even when it is produced domestically. CRISIL reported that the Saudi Aramco Contract Price, a key LPG benchmark for India, rose 46% between February and June 2026 amid supply disruptions and higher freight costs.
The government has simultaneously sought to protect household consumers from the full impact of global price movements. In June, a government release said the Saudi CP benchmark had risen 46% since February, while the retail price of a 14.2-kg domestic cylinder in Delhi stood at ₹942.
The new refinery-level targets address the physical supply side of the problem. Import diversification addresses the geographical concentration of supply. Neither, by itself, removes India’s exposure to global LPG prices.
A Buffer, Not Full Independence
The August order marks a shift from treating LPG supply disruptions primarily as an emergency problem to building a more permanent domestic response mechanism.
India’s experience in 2026 showed why that matters. Domestic production could be raised sharply during a crisis, but the country still needed imported LPG because consumption substantially exceeds local output. The government’s new targets give it greater room to push domestic production when international supplies become unreliable.
At the same time, India’s strategy is moving on a second track: diversifying imports beyond the Middle East. Taken together, higher domestic production capacity and a broader supplier base could reduce the impact of another major supply disruption.
But the latest numbers make one point clear: India is strengthening its LPG safety net, not becoming self-sufficient in cooking gas.
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