Govt sets LPG production targets for refiners; Reliance gets largest quota

The Indian government has established LPG production targets for individual refineries and upstream companies for the first time, aiming to create a domestic supply buffer following the West Asia conflict. The Petroleum and Natural Gas Ministry issued an order on August 13, specifying maximum LPG production levels for 21 refineries and upstream companies, resulting in a combined production potential of 63,810 tonnes per day—more than double the domestic LPG output recorded in the fiscal year ending March 31, 2026, and approximately 70% of the country's daily consumption.

The order specifies that Reliance Industries Ltd's older refinery must produce up to 18,000 tonnes of LPG daily, while India consumed 33.2 million tonnes of LPG in the 2025-26 fiscal year, with 13.1 million tonnes produced locally and the remainder imported. This high import dependence exposed the country to supply disruptions when the Iran war halted imports through the Strait of Hormuz.

The government has since empowered itself to order refiners, oil marketing companies, and upstream producers to increase LPG production as needed to ensure adequate domestic availability, equitable distribution, and fair pricing. The production schedule will be reviewed every six months, allowing for the addition of output from new refineries and infrastructure upgrades.