India Orders 30-Day LPG Reserve as Hormuz Exposes Storage Gap

India has directed its three state-run oil marketing companies to build a standalone 30-day strategic reserve of liquefied petroleum gas (LPG, the bottled cooking fuel that feeds most Indian kitchens), after a three-month conflict around the Strait of Hormuz choked the sea route that carries almost all of the country’s imported supply. The order, disclosed at an inter-ministerial briefing on 29 May, sits on top of the roughly 45-day rolling commercial inventory the retailers already keep across their depots and bottling plants.

The instruction reads as plain common sense. It also drags a long-ignored gap into daylight: New Delhi built dedicated underground caverns for crude oil more than a decade ago, yet its dedicated strategic storage for cooking gas today holds less than two days of national demand.

What the Ministry Ordered

The directive went to Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum, the three public-sector retailers that together control the bulk of the country’s fuel distribution. They have been told to hold enough LPG to cover at least 30 days of national demand as a separate emergency buffer, distinct from the commercial stock that turns over in normal trading.

Sujata Sharma, joint secretary at the Ministry of Petroleum and Natural Gas (MoPNG), set out the position at the briefing and stressed that day-to-day availability is not under threat. She pointed to domestic output running at a record pace of about 52,000 tonnes a day and said inventories of petrol, diesel, natural gas and crude had all been secured.

We have sufficient stocks of petrol, diesel, and LPG. Adequate inventories of natural gas and crude oil have also been secured.

That was Sharma’s reassurance to reporters in Delhi on 29 May. The message was carefully split in two: there is no shortage now, and the government is moving to make sure a future squeeze does not become one.

Why Hormuz Sits Between India and Its Cooking Gas

The trigger is geography. India imports a large share of its cooking gas, and the overwhelming majority of those barrels travel out of the Gulf through a single narrow channel. When that channel jams, the kitchen feels it before the refinery does.

1. 28 February: A wider conflict around the strait erupts, and traffic through the channel begins to thin out.
2. Early March: Iran signals closure, Gulf producers declare force majeure on some contracts, and crude tops $100 a barrel for the first time in four years before spiking far higher.
3. 13 April: A US-led naval blockade tightens the lane further, leaving hundreds of tankers waiting inside and outside the Gulf.
4. Mid-May: India-bound LPG carriers, including the vessels Symi and NV Sunshine, make rare and closely watched transits as Tehran selectively clears cargoes by flag and origin.
5. 29 May: The reserve directive lands.

Through that lane normally moves about a fifth of the world’s seaborne LPG. For India, nearly 90% of those cargoes pass through it. There is no quick land alternative for the volumes involved, which is why a problem at one chokepoint translates into a supply-planning emergency in New Delhi.

The Buffer India Built for Crude, Not for Cooking Gas

This is where the reckoning shows. India treated crude oil as a national-security commodity years ago and acted on it. Cooking gas, despite being the more visible fuel in ordinary households, was left to the commercial supply chain.

The Crude Template

Under its strategic petroleum reserve (SPR, an emergency crude stockpile), India built underground rock caverns at Visakhapatnam, Mangalore and Padur holding roughly 5.3 million tonnes, enough for several days of net crude imports. That programme has been operational since the late 2010s, and a second phase has been on the drawing board for years.

The Cooking-Gas Blind Spot

LPG never got the same treatment. The fuel is harder and more expensive to store at scale because it has to be kept pressurised or chilled, so the country leaned on rolling commercial inventory and frequent imports instead of a dedicated reserve. The Hormuz crisis turned that convenience into an exposure.

A 30-Day Cushion Needs Tanks That Are Not Yet Built

The arithmetic is unforgiving. India has two underground LPG caverns holding about 140,000 tonnes between them, after Hindustan Petroleum commissioned an 80,000-tonne rock cavern at Mangalore in 2025. That is the dedicated strategic base the country is starting from.

Now weigh that against the target. Against record annual demand of roughly 31.3 million tonnes, 30 days of national consumption works out to roughly 2.5 million tonnes, almost 18 times the dedicated underground storage that exists today. Industry consultancy S&P Global Commodity Insights has flagged that India could add only around 410,000 tonnes of LPG storage over the next two to three years, which still leaves the headline target a long build away.

So the order is real, but the reserve is mostly a construction programme rather than a switch that flips. Much of the near-term cushion will have to sit in the existing commercial network and at the country’s import terminals, with the dedicated strategic layer filling in slowly behind it. You can read more in the analysis of India’s LPG storage shortfall and diversification push.

330 Million Connections Tied to One Chokepoint

The reason this matters more than a routine inventory note is the customer base behind it. A decade of policy pushed cooking gas into homes that had never had a clean fuel, and that success quietly widened the country’s dependence on imported molecules moving through the Gulf.

• India now has 330 million LPG connections, including more than 105 million under the Pradhan Mantri Ujjwala Yojana (PMUY), the scheme that handed free connections to poorer households.
• Cooking-gas consumption climbed from 21.6 million tonnes in 2016-17 to about 31.3 million tonnes in 2024-25.
• The country imports around 60% of its LPG, drawing heavily on Gulf suppliers.
• Inbound cargoes are handled across 22 import terminals dotted along the coastline.

The scale of that rollout is laid out on the official Ujjwala connection scheme portal. A supply shock that would once have hit mainly industry and transport now reaches straight into tens of millions of kitchens, which is exactly why the government wants a buffer it can lean on for a month.

What the Order Costs the State Refiners

Someone has to carry the bill, and for now that is the three state retailers. Filling a 30-day reserve means buying and parking large volumes of fuel that sit idle on the balance sheet, on top of building or leasing the tanks to hold it, at a moment when refiners are already absorbing higher crude costs from the same crisis.

They were under strain before this order. Indian refiners have been squeezed by the gap between elevated international prices and capped domestic rates, a pressure visible in the way the country’s second pump-price hike in a week barely dented the refiner bill. The government has also moved to plug leakages, cracking down on bulk industrial buyers as state oil firms bled heavy daily losses from diverted diesel.

For households, the practical message from the government holds: stocks are adequate and there is no shortage at the cylinder. The government’s own reassurance that the system carries dozens of days of total cover is set out on its briefing on national LPG reserve capacity.

The reserve directive is a fix for the next crisis, not this one. Whether it becomes a real 30-day cushion or stays a paper target depends on how fast the tanks and caverns actually get built, and on how long the Gulf stays this difficult to cross.

Frequently Asked Questions

Is there an LPG shortage in India right now?

No. The petroleum ministry says stocks of cooking gas are sufficient and that domestic production is running at a record pace of about 52,000 tonnes a day. The 30-day reserve order is a precaution against a future disruption, not a response to an empty-cylinder situation today.

What exactly is the 30-day LPG strategic reserve?

It is a standalone emergency buffer of cooking gas covering 30 days of national demand, separate from the roughly 45-day rolling commercial inventory the retailers already hold. The order went to Indian Oil, Bharat Petroleum and Hindustan Petroleum.

Why does the Strait of Hormuz affect Indian cooking gas?

India imports about 60% of its LPG, and nearly 90% of those cargoes pass through the Strait of Hormuz. When conflict around the channel slows or halts tanker traffic, the country’s single most important cooking-gas supply route is squeezed.

How much LPG can India store today?

India’s dedicated underground LPG storage holds about 140,000 tonnes across two caverns, which is under two days of national consumption. A 30-day reserve would need roughly 2.5 million tonnes, so most of the target depends on new storage being built over the next few years.

Will cooking gas prices go up because of the reserve?

Domestic LPG for households is priced and subsidised by the government rather than set freely by the market, and the ministry has signalled no shortage. The bigger near-term cost pressure falls on the state retailers, which must fund and store the extra fuel while crude prices stay high.