Government asks state-run fuel retailers to build LPG reserves for 30 days amid supply concerns

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The Centre has directed state-run oil marketing companies (OMCs) to prepare plans for expanding liquefied petroleum gas (LPG) storage capacity to cover at least 30 days of demand, amid concerns over supply disruptions caused by the ongoing conflict in West Asia.

The move comes as India seeks to strengthen its energy security and reduce vulnerabilities arising from geopolitical tensions in a region that remains a key source of the country's energy imports.

Oil ministry directs OMCs to enhance LPG storage

Speaking to reporters on Friday, Petroleum Ministry Joint Secretary Sujata Sharma said the government has asked public sector fuel retailers to work on creating larger LPG reserves.

"We are working on strategic reserves. Oil marketing companies have been asked to formulate plans to maintain LPG reserves for a minimum of 30 days, and they are currently working on it," Sharma said.

The directive has been issued to major state-owned fuel retailers - Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) - which dominate India's fuel distribution network.

According to officials, the proposed reserves would be in addition to the regular commercial inventories maintained by these companies.

West Asia conflict exposes supply vulnerabilities

The government's decision follows disruptions in energy supplies linked to the recent conflict in West Asia, a region that accounts for a significant share of India's energy imports.

Officials said nearly 40 per cent of India's crude oil imports, 65 per cent of natural gas imports and about 90 per cent of LPG supplies originate from Gulf countries. The three-month conflict affected supply chains and highlighted the need for stronger emergency reserves.

While India has largely managed to secure alternative supplies of crude oil and natural gas, LPG availability has faced greater pressure, prompting authorities to take precautionary measures.

Natural gas plays a critical role in electricity generation, fertiliser production, compressed natural gas (CNG) distribution and piped cooking gas supplies to households.

Plans also underway to expand crude oil storage

Apart from LPG reserves, the government is also examining options to increase the country's crude oil storage capacity.

Although Sharma did not provide specific details about the proposed expansion, the move is part of a broader strategy to strengthen India's energy preparedness against future supply disruptions.

Government officials maintained that current fuel availability remains adequate across the country.

Government says fuel stocks remain sufficient

The petroleum ministry stated that India has sufficient stocks of petrol, diesel, LPG, crude oil and natural gas. Refineries are operating at optimal levels, while domestic LPG production has reached an all-time high of around 52,000 tonnes per day.

Sharma said no LPG distributorships have reported stock shortages so far. However, authorities have observed unusually high fuel sales at several petrol pumps.

According to the ministry, the increase in retail fuel demand has been driven partly by agricultural activities and a shift in purchases from private retailers and bulk suppliers to state-run outlets because of pricing differences.

More than 150 districts have recorded petrol sales growth of over 30 per cent, while 14 districts reported sales increases exceeding 100 per cent. Diesel sales rose by more than 30 per cent in 156 districts, with six districts witnessing growth of over 100 per cent.

States asked to curb hoarding and black marketing

Officials noted that sales at private fuel retail outlets have declined sharply, while state-owned retailers have witnessed increased demand. Since mid-May, IOC, BPCL and HPCL have raised petrol and diesel prices by around Rs 7.50 per litre, although private retailers have implemented steeper increases in some markets.

The government said it is closely monitoring the situation and has advised states and Union Territories to form special enforcement teams to prevent hoarding and black marketing of fuel.

Consumers have also been urged to avoid panic buying and purchase fuel only through authorised distribution channels, with authorities reiterating that adequate supplies are available across the country.

(With inputs from PTI)